Drug growing operation leaves landlord with massive costs

Extensive damage was caused throughout the property by tenant Hoang Van Pham when he installed heat pumps, put plastic sheeting over the windows and cut holes into the ceiling so hot air could be transferred between rooms for his marijuana crop growing enterprise.

A detailed report provided to insurer AMI by a loss adjuster showed at the time of the visit “the illegal substances had been removed by the police, but there was still a large quantity of the tenant’s belongings within the house as well as buckets and plant soil which was being used to grow plants.” AMI says it considers the damage caused by the tenant to be deliberate under the terms of its policy.

The fixed term year-long tenancy began on 3 April last year. Two months later, the landlord, who has name suppression, was alerted about the illegal drug growing operation and damage to the property and applied for termination of the tenancy for abandonment, rent arrears, water charges, refund of the bond, a disposal of goods order, compensation, exemplary damages, and the filing fee. The tenancy was terminated in August last year, with the case part heard. 

A second hearing over compensation and exemplary damages was heard recently, where the landlord produced documentary and photographic evidence and invoices for the repair and replacement costs for intentional carpet, wall and ceiling damage, the removal by Van Pham of the ceiling insulation and the installation of extra electrical cabling and wiring by the tenant. 

Carpets throughout the house had to be replaced and the insurer’s report noted mould where water has been spilt and allowed to soak into the carpet. A sum of $2,700 was awarded by the tribunal to the landlord.

There was extensive damage to the walls and ceiling throughout the house. Holes were made in the walls and ceiling for the installation of hot lamps and the trims where also damaged where plastic sheeting was laid over the carpets. Damage was also noted by AMI to the doors and windows – “the result of the tenant growing drugs within the premises”.

Extensive repairs to the walls and ceiling cost $6,900 and was awarded by the tribunal.

Van Pham also removed the ceiling insulation and damaged electrical cables and wiring when connecting additional wiring for the installation of heat lamps. A HPAC was installed with ducting placed across the whole of the roof. The tribunal awarded $1,000 for replacing the insulation and $362.35 for electrical repairs.

Curtains were at the windows of the property’s three bedrooms and living rooms. They were removed and most were missing at the time the tenancy was terminated and those that were left were badly damaged. The landlord was awarded $1,207.50 for replacing the curtains and also $343.85 for the cost of drug testing and $332.82 for rubbish removal, when Van Pham left behind general rubbish and large items, including a sofa, mattress, television, table and other furniture.

Unlawful use of premises

Seeking exemplary damages, the landlord claimed Van Pham had used the premises unlawfully, by setting up a cannabis growing operation. Exemplary damaged can be awarded, up to a maximum of $1,800.

In addition to the insurance report, the landlord produced evidence of the text exchanges and communication with police. Adjudicator V Pasupati says the evidence overall establishes that it is more likely than not the tenant intentionally set up and used the premises for an unlawful purpose.

“While I have not had any direct evidence from the tenant, the totality of the other available evidence demonstrates the unlawful act was most likely intentional,” he says.

“I note the tenant had only been living at the premises for two months before the police became aware of the illegal activity and alerted the landlord.”

The effect of the unlawful act has been significant, says Pasupati. “The landlord has suffered financially, having had to take steps to repair and remedy the damage. There has also been an emotional toll. There is a strong public interest in taking a punitive approach to such activity. Taking all these factors into account, I consider that exemplary damages of $1,200.00 ought to be awarded.”