Amanda Haack | 18 December 2012

How Queensland property insurance can help if a drug lab is found in an investment property

 How Queensland property insurance can help if a drug lab is found in an investment property

To the average person the concept of a drug lab operating out of a standard residential property may seem somewhat far-fetched. Surely these types of operations only exist in abandoned sheds on the outskirts of town, just trying to mind their own business?

Unfortunately, this is not the case. The drug lab epidemic has leaked into neighbourhoods across the country next door to unsuspecting families and children.

An article titled “Landlord blasts property agents after drug raid” was published in the Gold Coast Bulletin about the discovery of a drug lab property on the Isle of Capri.

This is a prestigious island suburb located in the heart of the Gold Coast with most properties boasting waterfront access. Not exactly an abandoned shed, is it? The property in question was a rental property and it once again highlights property managers’ exposure to potential mismanagement claims by their landlord clients.

According to the article, the landlord lived next door to the rental property and allegedly had concerns about its condition. The landlord reportedly blamed the property manager because he believed the agent’s inspections had been inadequate.

The setup of drug labs is not always easily identifiable, and in many instances landlords may look to blame agents and seek to recover their losses from them.

It is an apt time for the Real Estate Institute of Queensland to remind agents that the cover provided by the Aon/REIQ/ Professional Indemnity policy is unique in that it is the only policy which has a standalone property mismanagement extension.

This extension provides protection from allegations of negligence arising from any claim arising as a result of an actual or alleged breach of the agent’s professional duty as a property manager, including malicious damage to a rental property or loss of income or value to a rental property as a result of illegal activity by tenants (including drug labs).

With drug labs appearing in the most unlikely of suburbs across the country, this is a timely reminder for those in the real estate profession to be aware of the associated risks, both personally and professionally.

More information on drug labs can be found through the Queensland Police Service

Amanda Haack is events manager journal deputy editor at the Real Estate Institute of Queensland. This article originally appeared on the REIQ blog.

p top listings

Take luxury city living to a new level