Landlord pays high price for renter's medical marijuana grow-op. 'A grow-op, whether legal or not, is still a high-risk activity,' Insurance Bureau says
Landlord pays high price for renter's medical marijuana grow-op. 'A grow-op, whether legal or not, is still a high-risk activity,' Insurance Bureau says
http://www.cbc.ca/news/canada/british-columbia/go-public-medical-marijuana-landlord-tenant-insurance-pulled-1.3985875
Longtime landlord Darryl Spencer was left scrambling for insurance after discovering a tenant was growing dozens of medical marijuana plants inside and outside his rental house.
When the landlord told his insurance company about the perfectly legal grow-op, his coverage was cancelled, leaving him with no insurance, few rights and a big cleanup bill.
Spencer says the downstairs tenant in the Kamloops, B.C., rental property got a medical marijuana licence that allowed him to legally grow as many as 60 plants without his landlord's permission or knowledge.
A call from a concerned neighbour prompted Spencer, who is also a retired fire inspector, to check out the home he's rented out to different tenants for a decade.
He discovered a mess of extension cords, fans and bright lights packed into a room filled with dozens of marijuana plants. The upstairs tenant, a woman with a small child, was complaining about heat radiating through the walls and electrical breakers going off.
"I was worried about the fire hazard. That was my first thought because of the extension cords, the use of electricity and that something could catch fire," Spencer told Go Public.
Under new federal rules introduced last August, landlords have little recourse if a tenant is growing licensed medical marijuana. They don't even have the right to know it's happening. Yet it's landlords who are being denied insurance coverage when a tenant is growing medical pot.
Health minister won't appeal court ruling on right to grow medical marijuana
Go Public also found, while the federal government implemented the rules, it wants local authorities to ensure medical grow-operations are being set up and run safely. More than 30,000 people in Canada have permits to grow cannabis for their personal medical use.
Insurance cancelled
When Spencer notified his insurance company about the tenant's grow-op, Gore Mutual Insurance cancelled his coverage.
"They wouldn't cover claims to do with medical marijuana or air quality contamination," he says.
In a statement to Go Public, Gore Mutual Insurance says it "does not provide coverage for marijuana grow-operations regardless of their legality because this type of operation in a residential building presents inherent insurance risks."
Those risks, the company says, include "a greater likelihood of water damage, mould, fire, vandalism and burglary."
Under most basic home insurance policies, marijuana-related damages or anything that companies believe is "high risk" is not covered.
That view is shared by many insurance companies, according to the Insurance Bureau of Canada.
"While regulations may allow for the legal growing of marijuana for medical purposes, it does not change the structural risk grow-ops pose to homes and condos," Andrew McGrath, spokesman for the Insurance Bureau, tells Go Public in an email.
"The operation of a grow-op, whether legal or not, is still a high-risk activity."
Landlord jumps through hoops
Gore Mutual Insurance told Spencer it might reinstate his coverage if he got rid of the tenant and took specific steps to ensure the house was safe to live in.
The insurance company also wanted air and soil testing, plumbing and electrical inspections, and the house checked for mould.
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