How to avoid meth-ridden properties burning holes in your pockets

Short headline: 
Meth: the pandemic infecting the property market

Most New Zealanders active in the property market can spot a leaky home from a mile away. Their ears prick up at the mention of asbestos, and they’re conscious of earthquake strengthening.

But the alarm bells aren't quite so obvious if a property’s ridden with traces of methamphetamine.

The evidence can be hidden by a coat of paint, or the perception that drug users couldn’t possibly live in multi-million dollar houses with white picket fences.

Police say the supply of and demand for methamphetamine has been stable over the past six years.

Yet the fact P (pure methamphetamine) makers, who leave dangerous, invisible, and lasting chemical footprints in their wake, are often on the move, highlights the enormity of the problem.

As manufacturers move between residential and commercial properties, baches, hotels and motels, the number of properties affected will continue to increase, even if the number of P-users flat-lines.

A P testing and decontamination company, MethSolutions, estimates police have only busted around 2,000 of the 20,000 to 40,000 P labs it estimates have been in existence in the about 15 years P has been manufactured here.

Traces of meth can make you sick, devalue your property, and ultimately burn a hole in your pocket.

Lack of reporting

The problem is exacerbated by the fact property owners don’t always have to report contamination, meaning there isn’t a reliable record of which properties have been affected.

Contamination has to be reported when a local authority becomes aware of it. It will then issue a cleansing order under the Health Act 1956, requiring the property to be tested and decontaminated accordingly.

It is at this point that the contamination will be recorded in the property’s Land Information Memorandum (LIM), as well as in the regional council’s contaminated land register.

MethSolutions director, Miles Stratford, points out, having this on a LIM is a disincentive for property owners to report the issue. Rather, they will endeavour to hide the evidence and sell the property off, or deal with it through a private decontaminator.

Drug Testing Services director, Rick Lewer, gets his clients to sign a document saying they’re obliged to report any contamination to authorities. He points out how upset clients have become, on the occasions he has done so himself.

Contamination may also be reported when property owners make insurance claims for losses resulting from contamination.

For example, Tower’s Rental Protection policy stipulates, “You must make a formal complaint to the Police about the manufacture, storage, use or distribution of the controlled drug at your house before this cover applies”.

Who’s liable?

The fact property owners aren’t liable for any health problems their tenants may incur from living or working in contaminated properties, if they weren’t aware of the issue, provides another incentive for them to remain blissfully ignorant.

Stratford says he’s dealt with a case where the Auckland Council issued a West Auckland commercial property owner with a cleansing order in January 2014.

The owner ignored the order, and got a new tenant in July 2014. They only decided to do something about the contamination last month, by which time the tenant’s stock had most likely been contaminated.

Employers on the other hand are responsible for their employees’ health, and will be liable for paying for any issues, even if they’re unaware of contamination in the premises. ACC doesn’t cover this type of workplace injury.

As for state houses, Stratford believes it’s unlikely the Government will fork out to pay private experts to comprehensively test all the houses it’s committed to selling.

He says only one of the six or seven Housing New Zealand properties he’s tested have not been meth affected.

Insurance

Your insurer will cover the cost of decontaminating and restoring your property if you find out it’s been turned into a mini meth lab, right?

Wrong.

There are a few things to look out for in your policy.

1. Exclusions: Some policies may outright exclude drug-related damages. AA HomeCover for example stipulates it won’t cover “accidental damage or costs, directly or indirectly caused by, arising from or involving… pollution or contamination, including any contamination caused by, or in connection with, an illegal activity”.

2. Caps on the amount of cover available: Stratford says a number of policies limit cover for loss resulting from contamination to $25k. If testing costs $3k, decontamination $10k to $50k, re-testing another $3k, and restoration $15k, that $25k goes pretty quick.

3. Meeting certain obligations as a landlord: Tower’s Rental Protection policy and NZI’s Essence Home Insurance policy, for example, detail a list of actions landlords must take to be covered for chemical contamination. This includes completing an internal and external inspection of the house at least every three months, and documenting any new damage or concerns.

4. Proving the contamination happened when you were insured: Tower’s Rental Protection policy stipulates this for example. This highlights the need to do testing on taking out a policy, so you can prove when the contamination occurred.

Different insurers have different schemes for covering owners if their properties burn down, due to meth-related activities.

For some, this is included in general fire cover, while for others, the types of conditions mentioned above need to be met, and the cover may only be limited.

New standards in the pipeline

Standards New Zealand gave Local Government New Zealand a proposal in December, detailing how it would cost over $60,000 to develop a standard on the testing and remediation of properties used for the manufacture or use of methamphetamine.

The idea is to have a more standardised approach to the matter. This could include legally obliging property owners to disclose contamination in LIMs.

The proposal says it’ll take 11 months to put the standards in place. However, Lewer expects it’ll take up to two years for them to be set in stone.