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Is Your Farm Cottage Contaminated With P?

18 November 2013

Is your farm cottage contaminated with P?

Lee rented out her farm cottage. The tenant’s friend was busted for manufacturing P at the cottage. Lee has spent $40,000 on decontamination of the property and has lost $25,000 in rent.

Des looked at a small farm to buy and convert to dairy. The vendor mentioned to Des that the former tenant of the farm house was a P addict. Des could have done a preliminary test costing $300 to see if further testing for P was needed. Further testing would cost $3,000. If that testing showed contamination of the farm house, then decontamination could have cost Des up to $100,000. Demolition of the house might have been the only solution.  Des decided that the figures didn’t stack up – particularly if there were going to be substantial costs to make the dwelling safe to live in.

 

An increasing problem

Methamphetamine (commonly known as “P” or “meth”) contamination is an increasing problem. The by-products of P use and manufacture are extremely dangerous. Decontamination is strictly a job for the professionals. P labs are moved around to avoid detection and are often found in isolated locations. Farm houses are attractive targets. It is not just P labs that cause contamination. Using P in the house can also cause contamination.

 

Legal requirements

There are several laws that deal with P exposure and clean up. If it comes to the Council’s notice that a clandestine P lab has been discovered, the Council will record a P lab requisition on the LIM (Land Information Memorandum) database.  That notification will always remain on the LIM database – either as “current” (i.e. outstanding) or as “satisfied”. The Council will issue a “Cleansing Order” under the Health Act 1956 to the owner. The Council may serve the owner with a notice under the Building Act 2004 to avert immediate danger and erect signs warning the property is unsafe and should not be entered.

 

Insurance may be a problem

Contaminated properties pose concerns for insurance companies. Claims may be made for loss from fire or explosion, the costs of decontamination, alternative accommodation and loss of rent.  Some insurance policies do not cover these losses. When assessing a claim, an insurance company will consider various factors including whether the owner took reasonable steps to prevent the loss, carried out regular inspections, disclosed any known criminal history of the occupants, knew of any criminal activities at the property and reported suspected criminal activity to the Police.

 

Selling a contaminated property

Real estate agents must disclose outstanding statutory notices in respect of the property. If the standard sale agreement is used, the vendor must also disclose such notices. If the real estate agent or the vendor knowingly exposes the public to danger (e.g. by conducting an open home at the property) they could be criminally liable. The agent could also be guilty of unsatisfactory conduct under the Real Estate Agents Act 2008.

 

Renting a contaminated property

Under the Residential Tenancies Act 1986, a landlord must ensure that a tenanted property has been decontaminated and is safe to live in. However, a landlord is not obliged to disclose to tenants that the house has been used for the manufacture of P or has been contaminated by P. If asked, a landlord must answer any questions about contamination truthfully.

A landlord will be able to evict a tenant who has illegally used a property or has failed to keep it clean.

 

Prevention is better than cure

Owners of rental properties should be vigilant and proactive when it comes to P detection. They should carefully screen prospective tenants, undertake regular inspections and consider installing an alarm system to detect the manufacture of P at the property.

 

Please email me at barbara.mcdermott@nwm.co.nz with your ideas for future articles.  Keep an eye out for next month’s column, where I will discuss another relevant rural legal issue.


Barbara McDermott is a partner of Norris Ward McKinnon, specialising in commercial and rural law.  With offices in Hamilton and Huntly, we have friendly, expert legal advisors ready to help you with your business and personal legal matters.   Find out more about us at www.nwm.co.nz