This article considers the legal issues that arise, action that can be taken and ways in which landlords can reduce the risk of their property (be it commercial or residential) being converted into a cannabis farm by tenants.

The Legal Issues That Can Arise

• Landlords may face criminal sanctions where they are concerned in the management of a property and knowingly permit or allow cannabis to be cultivated on the premises (section 8 Misuse of Drugs Act 1971).
• Where a tenant has converted a property into an illegal cannabis farm, a landlord may have problems recovering it.
• Disconnection of the electricity supply by the electricity provider.
• Liability to pay for electricity stolen during the illegal production of cannabis.

Answers to the Legal Issues

• Despite the potential liabilities that a landlord faces, they cannot turn a blind eye and are advised to take immediate action where they know or suspect that cannabis is being grown unlawfully. This action involves informing the police straight away and taking steps to get possession of the property.
• Depending upon whether the property in question commercial or residential, there are different avenues available to a landlord. In the case of commercial premises, it may be possible to arrange for private bailiffs to change the locks (in some cases after the service of a notice). In residential properties a notice is usually required to be served before a court order can be obtained to evict the tenant, which can take several months.
• An illegal cannabis farm often involves the theft of electricity with perpetrators tampering with meters and cabling which can result in the electricity being disconnected by the supplier on discovery of the farm. An issue for the landlord who eventually gets that property back is whether the disconnection was lawful and whether they must pay for the supply to be reconnected. In most cases the disconnection will have been lawful, and the landlord will have to pay the costs of reconnection.
• Electricity suppliers may also assert that the landlord is liable to pay for the electricity stolen by the tenant. This arguably arises from a deemed or express contract with the landlord. It may be possible for a landlord to challenge this given that regulatory obligations mean that suppliers must turn to the individuals who stole the electricity, rather than the landlord, who will also be victim of the crime, in seeking compensation.

Reducing the Risks

The best way to identify whether someone is a genuine tenant, or not, is by undertaking some basic checks. Landlords should:

• Take time to carry out checks on prospective tenants including credit checks and taking up references using reputable tenant referencing companies.
• Be wary of anyone preferring to pay significant rent in advance or in cash.
• Be wary of anyone wanting to keep the utility bills in the landlord’s name.
• Be wary of anyone requesting no periodic inspections (or preventing the inspection of the property after the tenancy is granted even when given reasonable notice).
• Check whether buildings insurance will provide cover for malicious damage and the limitations and conditions of such cover because it is not unusual for significant physical damage to be caused by rogue tenants in these circumstances.

None of these steps guarantee that sophisticated criminals will be deterred, but they do help reduce the risks associated with letting to unscrupulous tenants who are intent on damaging a property by turning it into an illegal cannabis factory.

If you would like further information about any of the issues raised in this article, please contact Sarju Kotecha at sarju.kotecha@haroldbenjamin.com