Roll Your Own – Organized Crime Moves Into Rental Properties

Alex Kubyshyn shared this press release (I think from Calgary Police or Health) which is a good reminder of why you should check on your properties on a regular basis to prevent marijuana grow-ops. In BC, as I learned when I lived in Kelowna, grow-ops are a much larger problem than in Alberta.

I’ve run into several grow ops in my time, and they’re never easy. There’s always a couple inexperienced investors who find former grow-ops that they want to buy and rehabilitate, and that’s almost never a winning game, particularly if you’re a newbie. It’s expensive and there’s about 50 things that can go wrong. Personally, I have no interest in buying former grows, no matter what the discount.

If you’re an investor or property manager, you need to know the reality of what’s out there, because it affects every class of property. In my old office at Davies Management, I once had someone ask me why I had a poster from the EPS on the wall about how to identify potential methamphetamine labs. Because they can show up anywhere. In Kelowna, the most common location for grow ops was in partially finished subdivisions with price tags over $500k. Why? They growers have deep pockets, people coming/going at strange hours with lots of ‘garbage’ or equipment doesn’t look strange, and there are fewer neighbors to catch on to you. They’re not just working in the sketchy areas.

Here’s the press release:

Recently six (6) Marihuana Grow Ops were found in a large rental townhouse project. Two of the units were immediately condemned by Alberta Health Services, and the remediation costs for these two units are estimated at $80,000 to $90,000 each. It will take about six months to restore the units to a point where they can be re-rented. This means there will be no rental income during that time.

According to the Calgary Police Service Drug Unit, more and more Grow-ops are appearing in Rental Property.

Organized crime is using front people to rent the unit and pass the screening, and the criminals pay their rent for them.
Regular inspections can be helpful in preventing Grow-ops; however, in these particular cases regular inspections were done by way of a 24 hour notice. It turns out that the criminals quickly dismantled the Grow-op – lighting, pots and plants, chemicals, etc. – and put everything into the attic so they weren’t discovered. After all, who normally checks the attic when conducting a regular inspection? Most people probably don’t! Also, doors leading to the basements were locked so the renters, who were turning a blind eye to the illegal operation in exchange for free rent, couldn’t access the grow-op.

Here are some of the Grow-op warning signs to look for:

• Windows blackened out
• Minimal furniture, if any
• Neighbours complaining of humming sounds – from loud fans and/or modified venting systems – could be through the attic or into the sewer system through the stack pipe
• “Skunky” smell
• Condensation in windows
• Icicles hanging from vents, eaves or chimney stacks during the winter months
• Sweating, staining, condensation, or wet spots through the unit
• Structural damage to the concrete near the electrical panel
• Moisture damage along the foundation, drywall and window casings
• Pot rings on basement floors – caused by chemicals used to enhance plant growth
• Electrical tampering – including the electrical panel, as well as the addition of electrical wiring, fixtures and lightning

Owners and Property Managers are encouraged to conduct regular inspections of their property to ensure the rental unit(s) are functioning properly for their tenants. Advising applicants and prospective tenants of your regular inspection policy at the outset may help to prevent criminals from renting from you.

Don’t let locked doors prevent you from conducting your inspections. Remember neither the tenant nor the landlord can lock the other out.

Based on this new experience, a thorough inspection of the property should be made, including the attic and crawl spaces, if they exist.

If you suspect you have a Grow-op in your property — Call the Police immediately. Let them check it out. Let’s Keep Organized Crime out of Rental Properties.