The Criminal Proceeds (Recovery) Act came into effect in December 2009 since which time Police has investigated about $208 million worth of assets. An estimated $57.4 of this relates specifically to methamphetamine offending.
In 2008 there were about 176 clandestine methamphetamine labs (also known as clan-labs or P-labs) detected and/or dismantled by Police . The price per gram of methamphetamine has ranged from about $600 in 2007 to $800 in 2011. With increasing busts, price tends to go up, and P-labs become presumably more clandestine and profitable. Apparently an investment of $45 will yield a $955 profit as at May 2014, suggesting that the street price continues to rise. The methamphetamine market in New Zealand is estimated to be worth $1.2 billion per year.
Problem
While there are many health, social and economic risks associated with the use of methamphetamine, the manufacture also poses severe health and contamination issues, particularly because the ingredients used in manufacture are poisonous, corrosive, toxic and extremely flammable. For each gram manufactured, a far greater amount of dangerous waste is produced, which is harmful even in small quantities.
Whether you are an investor/landlord or a tenant, it may pay to have made yourself aware of any possible issues relation to methamphetamine at your property. It may also be prudent in some instances to be wary of any neighboring properties that are in close proximity if it seems likely that chemicals could have drifted onto your property.
The exact number of methamphetamine labs is unknown and it is expected that they tend to be moved around. Residential investment properties may be particularly susceptible.
The cost of decontamination can be expensive given the tendency of the offending chemicals to seep into materials.
The cost of cleaning a 3-bedroom house starts at about $4,000 if someone has been using methamphetamine. If the house was used for manufacture the cleanup cost can average about $40,000. In really bad situations the house will have to be demolished.
As a Landlord, providing contaminated premises is a breach of the landlord’s obligation to provide premises in a reasonable state of cleanliness. In addition once contamination is discovered a number of processes are triggered:
Police will notify the local Council.
Council will issue a Cleansing Order, or a Closing Order.
The LIM database will record the property as being a meth lab.
What to do
Given the serious consequences involved it is worth your while to take precautions, including:
Arrange a detection test prior to purchasing any new property and specifically ask the agent and/or vendor whether there is any suspicion or actual knowledge of any illicit use within the property or by any occupants.
Checking whether your insurance policy covers the contamination related issues (and what conditions apply to cover if is available). Link to The Drug Detection Agency
If you already own a rental, install a monitoring system and/or arrange inspections from to time. A swab test costs between $100-$500 and full lab tests costs about $2,000.
This article has been written by Aman Prasad, Associate at Patel Nand Legal.
Feel free to contact him for your next home purchase on 09 522 2757 aman@patelnand.co.nz
