In July this year, the national press published our warning to landlords about the dangers of renting houses to tenants offering 6 months rent in advance. Drug cultivators and manufacturers have long targeted residential landlords in a bid to establish drug factories in residential neighbourhoods. As landlords have begun to enforce more stringent tenant referencing, as a result it is becoming increasingly evident that these street-savvy criminals are now targeting the commercial sector where less thorough checks are enforced.
Last week police raided a large industrial unit at Crossens in Southport, Merseyside confiscating cannabis plants with a street value of £150,000. With the intention of creating one large cannabis factory, the tenants knocked down partitioned walls of individual units for their drugs operation.
Not only will the landlord have to pay to have the damage repaired, but he will also have to pay to have the building cleaned, rubbish and equipment removed and forfeit the rental income until a new tenant is found. While six months rent in advance may have seemed like a gift from the gods, no doubt this landlord is now victim to the false economy created by the temptation.
The commercial sector, unlike its residential comparison is faring badly, with rentals declining and rents decreasing amid the impact of the recession. As business’ struggle to remain afloat, there is little movement with new start-ups and many commercial and retail units remain vacant. Similar to the tenant referencing checks of the PRS, the same ardent and thorough checks need to be applied to any tenant requesting a short-term lease on commercial property.
Sim Sekhon, senior partner for Legal 4 Landlords reported that monitoring rental properties in this sector could be problematic due to the common practice of sub-letting in commercial properties. Mr Sekhon who advises the sector on the avoidance of illegal activity within properties said,
“As with any tenancy or short-term lease, thorough reference checks can be applied on the named tenant or lease holder, but the difficulty remains when a property is sub-let. Landlords and letting agents are often unaware when commercial premises are passed on to tenants who are using them as drug factories and in many cases only find out after the fact, when it’s too late.”
This years Home Office report stated that an average of 3000 premises are raided by police annually. Cannabis plants seized from the yearly raids are estimated at a street value of 60 million pounds.
“It’s tempting to any landlord of a vacant industrial or commercial building to accept anywhere from 6-12 months rent in advance, especially considering the present economy,” added Mr. Sekhon.
Jacqui Smith, Home Secretary announced earlier this year that cannabis would become a class B drug again. An annual increase of 23 tonnes was seized in 2008/2009 compared to 2007/2008. Mr Sekhon advises that commercial properties should be regularly visited and checked and if in any doubt contact the police.