Because there are many exclusions revolving around drug use in most insurance policies, your ongoing, diligent super- vision of your rentals will play a crucial role in your ability to enlist financial assistance and other aid and insight from your insurer in the event that your tenants do opt to cook some- thing other than turkey this holiday season. Talk with your insurance agent in advance of any problem, and ask them di- rectly how you can best protect yourself from these potential issues. Consult an expert in Fair Housing law before adjusting your lease to screen out potential drug users, dealers, and manufacturers to make sure that you are protecting yourself while remaining within the bounds of the law. •
SIGNS YOUR PROPERTY IS BEING USED AS A DRUG LAB
In addition to the standard background check, be cautious with tenants who are willing to pay multiple months in advance or want to pay only in cash. These tactics may be a screen to keep the landlord “off their backs” and avoid leaving a paper trail for authorities. Re- member to always fol- low Fair Housing laws, but don’t fail to set standards for who you allow in your proper- ty. Don’t be tempted to place someone too
PHYSICAL SIGNS: • UNUSUAL CHEMICAL SMELL - meth production can smell like ammonia or acetone (like cat urine), not a particular- ly pleasant smell. • UNCOMMON ITEMS ON SITE - large quantities of pseudo- ephedrine packets, Sudafed packets, cold and flu tablets, strange bottles and jars, rubber tubing, glass flasks, un- usual/large number of empty chemical bottles. • UNAUTHORIZED MODIFICATIONS TO THE PROPERTY - could include windows that are covered up and elaborate security systems. Pipes or hoses may need to be funneled through the roof, and unexplained holes in the ceiling could be a sign of hidden marijuana grow operations. • IRREGULAR USE OF THE PROPERTY - look for signs the property is being lived in, not just used as a grow station or lab. Kitchens, garages and bathrooms are the most common rooms used by illegal drug lab operators. The yard may also be overgrown or show odd patches of dead grass where toxic byproducts may have been dumped. • VISIBLE DAMAGE - water damage causing warped walls and floorboards or stained carpets could be more than just a leaky roof. Fading paint can be caused by intense lighting used in the hydroponic method of growing marijuana. TENANT BEHAVIOR: • Increasingly late rent and utility payments or they start paying for rent only in cash • They ignore problems or you • They won’t let you or maintenance inside the rental • They have a lot of visitors throughout the day who come and go quickly • They exhibit illogical behavior What to Do if You Find Out Your Tenant is Involved with Drugs If you are suspicious of illegal activity, contact authorities
BreAnn Stephenson is the assistant vice president of Affinity Loss Prevention Services. Helping you stop “bad stuff” from happening at your property is her mission. She may be reached at www. affinitylps.com, where you can also find discount codes for StoveTop FireStop’s cooktop line and other protective products.
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quickly to avoid a gap in receiving rents – placing the wrong tenant could become much costlier than one or two months’ or maybe even a year’s worth of lost rents while you are cleaning up the mess.
immediately. If your tenant is on a month-to-month agree- ment, simply do not renew it. If, however, they are on a term lease, you may either have to start the eviction process or of- fer Cash for Keys. If you are not familiar with Cash for Keys, it is the practice of paying your tenant an agreed sum to move out in a specified time frame. For example, some investors may offer $300-$500 and require the tenant be completely moved out in one or two weeks. Even if you use this method, still get everything in writ- ing. You can have the tenant sign a “Relocation Assistance Agreement” that includes a provision stating the house will be turned over in good condition, broom swept clean, and with all appliances and fixtures in place. Most importantly, make sure you are there when the tenant moves out. To eliminate their opportunity to do any damage as they leave, you may want to enlist local law enforcement to escort you and remain until your tenant is finished. After they have moved out, secure the property by chang- ing the locks, and making sure all access points (windows & doors on all levels) are locked and secured. This is also a good time to install a portable alarm system. Lastly, monitor the property after they are gone. Unfortunately, it is very com- mon for tenants to come back and cause significant damage after all their valuables are out.
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ROUTINE INSPECTIONS You or your property management should perform regular inspections and be diligent in looking for warning signs of crime on the property. You don’t need to be overly paranoid, but take note of anything suspicious or out of the ordinary. Also make sure you have a plan of action in case you or your property manager encounter a suspected criminal. Let tenants know that you intend to be present by including reg- ularly scheduled inspections in the lease. ENLIST YOUR NEIGHBORS This rental is your investment, but to your tenant and their neighbors, it is part of their neighborhood. Most will want to make sure their home is safe and their streets are free from crime. When you or your property manager stops by on regular inspections, spend a few minutes talking to the neighbors and foster an ongoing relationship. Good neigh- bors can be the best eyes and ears on your property – even a great property manager can’t be there daily.
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