A ‘growing’ problem 

Cannabis farms are being uncovered with depressing regularity in the UK and, where once they were generally on a large scale, predominantly sited in industrial units, remote warehouses and disused farm buildings, the police are increasingly finding smaller scale cannabis farms in residential private rented properties on unremarkable suburban streets. Statistics show that around 90% of cannabis used in the UK is grown in farms which are operating from rented homes. 

These smaller, residential ‘farms’ are favoured by drug growers for a number of reasons: 

• A smaller cannabis operation is quicker, cheaper and easier to set up 

• It is easier to hide while the risk is spread, as is the financial impact of any farms being discovered 

• Absentee landlords provide the perfect opportunity for illegal operations 

Following the discovery of more than 1,000 cannabis farms across London by the Met Police in a six year period ending in 2021, in 2023 ‘Operation Mille’ (a month long UK-wide combined police force operation) discovered more than 1,000 farms in raids, seizing plants worth £130 million and arresting over 1,000 suspects. 

To help landlords manage the potentially traumatic issue of a cannabis farm in their property, NRLA deposit protection provider mydeposits, along with insurance partner Total Landlord has put together this helpful guide. 

A risky business 

From rising interest rates to changes in legislation, being a landlord and letting properties to tenants comes with an accepted level of risk. But there is arguably nothing that represents a bigger risk to a landlord’s investment than their property being turned into a cannabis farm, as the following explains.  

Structural damage: Once the tenancy is secured the criminal gangs move in, with homes often completely destroyed. Internal walls are frequently removed and floorboards ripped up to make room for hydroponics systems, high intensity lighting and ventilation shafts, which all represent major risk to the integrity of the property.  

Fire hazard: At the same time, because of the need for near constant heat and light to propagate the cannabis plants, the criminals may attempt to engage in electricity theft by tampering with or bypassing the electricity meter. Doing so risks electrocution and severe burns, as well as increasing the risk of fire due to exposed wires and connections that can easily become overheated. What’s more, the electricity theft is often hidden so fire fighters have more difficulty in finding the source of an electrical fire, which puts not just the immediate property at a greater risk of being badly damaged but also any adjacent properties. 

In our experience: At Total Landlord, we have seen a rise in cannabis farms; in particular those that cause major fires in properties due to the electrics being rewired and overloading of sockets from heat lamps.  

Flooding and mould: The cultivation of cannabis and botched jobs in irrigating the plants can easily result in mould and water damage.  
 
Illegal cannabis farms not only pose a huge threat to landlords and tenants, but also to the safety of people living in neighbouring properties, so it is important that landlords can recognise the warning signs and know how to protect themselves and their neighbours against the risk of unwittingly becoming a victim of this criminal activity. 

It is vital that landlords are alert to the risks. The largest proportion of buildings we are called out to are residential properties. We see landlords who don’t carry out the necessary checks and take a chance on tenants and also homes that are rented out, then sub-let. Recently we were called to a beautiful two-bedroomed terraced cottage in in a very, very small cul-de-sac. Cannabis was being grown in every room bar the kitchen, with an estimated £1.6million worth in total. The property was literally an hour from going up in smoke – and probably taking the rest of the homes on the street with it. They had electricity over water and it was so hot in the loft that our Crime Scene Investigator couldn’t take photographs because of the steam. The cost of repairs to that house for the landlord are immeasurable.

Cannabis Dismantling Team Sergeant, Merseyside Police

The importance of tenant referencing 

Thorough tenant referencing is one of the most important steps landlords can take to protect themselves against troublesome tenants and maximise the chances of having a successful tenancy.  

The process enables you to build up a detailed profile of the prospective tenant so you can assess whether they’re likely to be suitable occupants for your property. It should flag up the most common potential issues, allowing you to weed out those tenants that are likely to become a problem in the future. 

Robust tenant referencing should include: 

• Proof of ID 

• A utility bill or bank statement 

• Carrying out a credit check 

• Confirmation of employment 

• Taking up references 

• Check regular income and expenditure 

• A right to rent check 

But it can be easy to miss the warning signs. So, to help you get it right, this guide from Total Landlord takes an in-depth look at what’s involved in putting together a comprehensive reference for renting.

WARNING SIGNS to look out for with tenants 

With prospective tenants: 

• Overly eager to pay several months’ rent up front, especially in cash 

• Asking for the tenancy to start immediately and suggesting references are an unnecessary expense 

• They request complete privacy 

With a tenant in place: 

• Not agreeing to or missing, agreed appointments or inspections 

• Not allowing access to the property 

• Not replying to communications 

• Changing locks or installing security systems without your knowledge 

Fostering a good tenant relationship 

Creating a good relationship with the tenant from the start is often overlooked, but it can be a simple yet vital way of protecting your investment. When a tenant feels you are invested in them, they are more likely to look after your property and also to share any issues with you or tell you when things need maintaining, before they become a bigger issue. With tenants, communication really is the key to a successful tenancy.   

The importance of check-in and check-out reports 

A check-in report is vital as it records the property’s condition and standard of cleanliness at the start of the tenancy. Without this there is little or no comparison that can be made when the tenancy ends, other than through mid-term property inspections, which may be four or six months after the move in date. 

The importance of inspections 

Once the tenant has moved into your property, the best way to make sure they are looking after the property and meeting all their responsibilities is to carry out regular property inspections. We recommend an initial one within the first month of tenancy and then regular scheduled inspections at least every three months. Assuming you are given access to carry out an inspection, following at least 24 hours’ notice, below are some warning signs that your property may be home to a cannabis farm.  

Note: If you can’t gain entry to the property as normal then visit at different times of the day to carry out an external visual inspection. 

WARNING SIGNS to look out for when inspecting the property. 

Some of the signs that cannabis is being grown in a property are: 

• strange smells and sounds 

• high levels of heat and condensation 

• visitors coming and going, often at unusual times 

• high increases in electricity bills or tampered wiring 

• gardening equipment being taken into a property, such as plants pots, fertiliser, fans and industrial lighting 

• sealed or covered windows, permanently closed curtains 

• snow melting quickly or birds gathering on the roof in cold weather 

Read the mydeposits NRLA essential guide to inspections on our website here  

Fire, floods and violent crime all result from cannabis farm set-ups, so it is vital that people are aware of the signs.

Merseyside Police

mydeposits case study 

The following mydeposits case study highlights the importance of tenant referencing, maintaining a good tenant relationship and how this scenario could have been avoided if inspections had taken place. 

Deposit amount: £2,650 
Disputed amount: £2,650 (full amount) 

What happened? 

The tenant said:  

• the property was not in good condition and was in need of a renovation at the start of the tenancy 

• due to constant draughts some of the windows had been boarded up 

• they accepted responsibility for not returning the keys, but not the cost of changing the lock 

The agent responded that:  

• the property was in a reasonable condition at the tenancy start though some areas had been scheduled for updating after the tenancy had ended 

• the check-out report suggested the property had been used to grow cannabis 

• the report also recorded major alterations to ceilings, walls, floorboards, doors and window frames 

• despite agreeing to inspection dates the tenant had not allowed access during the two year tenancy  

• with no keys returned the landlord changed the locks out of concern 

What evidence was provided? 

• Tenancy agreement, check-in report, check-out report, estimates, invoices, emails 

What was decided and why? 

Lock replacement: 

• The two reports showed the keys were not returned, so the landlord was entitled to secure the property by replacing the locks, which the tenant was responsible for  

• Due to the suggestion of illegal activity in the property, the £220 invoice for a new front and rear locks and keys was found fair 

Property condition: 

• General waste and illegal activity paraphernalia were left behind, the removal for which a detailed invoice of £250 was awarded in full 

• The £3,200 invoice for a full clean was reduced to account for the standard of cleaning at the start of the tenancy and the agreed claim of £288 was awarded in full 

• To make good on the alterations carried out and resulting damage caused by the tenant, the landlord provided an invoice for £2,450. Allowing for the starting condition of the property and fair wear and tear, £1,960 was awarded, but limited to £1,892 as the adjudicator was restricted by the maximum of the total deposit and amount disputed 

Key takeaways: 

• Maintaining a good relationship with tenants (where possible) is important to make sure that access is allowed when an inspection is due 

• A tenant denying access more than once may be a cause for concern and require more action (not least for required legal safety inspections) which may include talking to friendly neighbours about any possible issues 

• Landlords may consider the option of independent legal advice to explore their options against the tenant, especially if the costs to make good exceed the deposit, as in this case study 

How to weed out criminals from your property   

It’s important to understand the tenant’s rights – and your own – when it comes to accessing the property. Typically, the tenancy agreement will state how much notice you have to give the tenant if you want and need to enter the property – normally 24 hours. 

If the tenant refuses access when you have a valid reason for requesting entry, this can put them in breach of their tenancy agreement. Even so unless it’s an emergency situation you can’t just let yourself in without specific permission from the tenant. It’s important to understand why the tenant has refused you or someone else (such as a Gas Safe engineer) access. 

Entering the property in an emergency. If you strongly suspect dangerous or criminal activity is going on, then assuming you can gain access you are allowed to enter the property in an emergency. 

There is a lot of useful information on the laws around gaining access in this article from Total Landlord.  

Once it has been established that your tenant has been cultivating cannabis in your property, the priority is to inform the police. Stay safe and avoid antagonising your tenant. You will then need to start eviction proceedings. It is important that you get this right, so we recommend seeking the advice of a professional eviction service such as NRLA partner, Landlord Action.

Steve Barnes, Head of Broking at Total Landlord

As a landlord am I in any way responsible? 

Under the Misuse of Drugs Act 1971 a landlord or letting agent who allows their rental property to be used for the production or supply of controlled drugs can receive a maximum of 14 years in prison and/or a fine. However, landlords must be ‘knowingly’ allowing the drug to be grown in their homes to be prosecuted. But, even if you have no knowledge of the operation, you could still be left in the midst of a criminal investigation, and with a huge financial cost to make good on your property – so it pays to be vigilant. 

But I’m covered for the damage aren’t I? 

Damage caused by cannabis farms can be extensive and very expensive to rectify. Some landlord insurance policies will not cover you for damage or loss of rent resulting from criminal activities such as cannabis farming. Even those that do may set a maximum limit on any settlement payable, which may be significantly less than the costs you as a landlord may incur in reparations and loss of rent. 

Our Premier policy is one that does cover malicious damage claims. To make a successful claim you must show that as a landlord you did all you could to reduce any risks, that you carried out full and robust reference checks and, that regular inspections of the property took place, or any claim may be invalidated.

Steve Barnes, Head of Broking at Total Landlord

Conclusion 

Those behind illegal operations such as cannabis farms can also be engaged in more nefarious activities such as people trafficking or modern slavery. They will often offer to pay several months’ rent in advance as a ‘sweetener’ and to avoid any contact. They could even have a fake ‘family’, or have seemingly respectable ‘professionals’ set up to pose as your new tenants.  

Don’t be rushed into agreeing a tenancy, however attractive the financial inducement. Always take time to carry out the relevant ID and credit checks and carry out thorough referencing. 

By following our advice and acting swiftly when discovering  evidence of a cannabis farm in your property, you will be doing all you can to minimise the financial, legal and reputational costs that this situation can cause. 

• #mydeposits