Legal cannabis crop costs landlord his insurance and $5000 in inspections. The legalisation of medical cannabis in British Columbia, Canada, brings new issues for landlords. Although you can legally grow cannabis with a licence, your landlord’s insurance will not cover you for any damage tenants do to your property. So, landlord Darryl Spencer discovered after telling his insurance company about his tenant’s legal grow operation.
Spencer found his tenants growing pot at his property after receiving a call from a neighbour. A retired fire inspector, he went to check out the house. The upstairs tenant complained of heat radiating through the walls and the power constantly tripping. Downstairs Spencer found dozens of cannabis plants along with a maze of extension cords, grow lights and fans. It was a fire hazard. He was left with a huge clean-up bill and a cancelled insurance policy.
New Medical Cannabis Rules
As of August 24, 2016, patients using medical cannabis can grow their own or have someone else grow it for them. Just register with Heath Canada and make a submission for approval to grow a small amount for your medical purposes. You need to include where you will grow and store the weed in the application. As well as proof of your medical prescription.
You can also nominate someone to grow cannabis for you. They have to pass a background check, have no drug convictions in the past decade and can only grow for two people. This includes themselves.
Patients accessing medical cannabis have a third option, which is to buy from one of Health Canada’s 34 approved producers.
How much you get approval to grow depends on how much your doctor prescribes. If you have a prescription for 1 gram a day, then Health Canada would give approval to grow two pants outdoors or five plants indoors. The difference in the indoor and outdoor amount is that cannabis plants grown outside have a higher yield. You can buy the seeds and plants from Health Canada’s licenced producers.
No rights as a Landlord
Legal Cannabis Crop Costs Landlord His Insurance. Canada’s new rules leaves landlords out in the cold when it comes to legal protection. Tenants do not have to tell landlords of their intention to legally grow pot as it may prejudice their right to affordable access to medical cannabis.
Spencer had his landlord insurance cancelled when he told his insurance company his tenant had a legal grow operation on the property. Insurance companies do not cover landlords for property damage from medical cannabis growing. According to the Insurance Bureau of Canada, the insurance risks are the same whether the grow operation is legal or not. These include the risk of fire, burglary, water damage, mould and vandalism.
30,000 Potential Angry Landlords 30,000 Grow Licenses Issued in Canada
The government expects local authorities to check up on growers to ensure licence holders run cannabis grow operations within their guidelines. This is to avoid risks to the community from local grow operations. But, this is difficult. Health Canada has issued more than 30,000 licences to Canadians to grow pot for personal medicinal use. And, while the federal government sets out guidelines for setting up a home growing operation, Health Canada does not pass licence holder details onto local authorities. There is no system for checking if people are complying with the number of plants allowed on their permit.
Insurance eventually reinstated
Spencer’s insurance company told him they would reinstate insurance coverage if he evicted the tenant. They also requested air and soil testing, and electrical, plumbing and mould inspections. Spencer jumped through hoops to comply with these demands, meanwhile searching for another insurance company to cover him. He eventually did find one, but they wanted double the price of the old premium.
Legal Cannabis Crop Costs Landlord His Insurance and $5000
Being without insurance for two months was stressful with the costs mounting. The tenant moved out after Spencer paid him $1300 and returned his damage deposit in full. After the clean-up costs, the total cost of this is around $5000. However, Spencer’s old insurance company has reinsured him for almost the same cost as before.
Government changes to growing medical cannabis have been made without considering the far-reaching effects to the damage it causes to leased properties or the stress to their owners. With the insurance risks posed from pot growing operations in the suburbs, it is any wonder insurance companies see growing pot at home as a high-risk venture.
When the laws changed, the government failed to provide clear direction to landlords and insurance companies about the consequences of legalising medicinal cannabis. This needs to change.
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