LANDLORDS WARNED OF GROW-OP EXEMPTIONS

Insurance companies are starting to exclude property damages caused
specifically by marijuana grow operations, warns a local insurance broker.
Although the exemption is not new, it is becoming more and more
commonplace, he says.

"The wording is there. It's always been there, it's just how you interpret
it. There are exemptions for any property that is illegally acquired, kept,
stored or transported," he says. "It just depends on each insurance
company's assessment of the risk."

More and more lately, insurance policies have declarations attached which
specifically exclude damages caused by marijuana grow operations, he warns.
"Once you start excluding the grow-ops, it sets a precedent for the
courts," he says.

There are an estimated 500 to 1,200 marijuana grow operations in the
Chilliwack area, according to Chilliwack and District Crimestoppers
Association statistics.

"We estimate that this represents five to eight per cent of residential
rental housing," says Dianne Darke, a local Crimestoppers board member.
"Many landlords are unaware when they rent out a house that it may be used
for a grow operation. This could leave a landlord totally responsible for
the cost of damages to the dwelling."

Crimestoppers and RCMP recommend diligent screening of prospective tenants
and regular property inspections to prevent grow-ops from being set up.
Many insurance brokers are now distributing information to landlords on how
to recognize and prevent grow-ops, since the number of these operations has
mushroomed in the last five years. "Landlords do have the right to inspect
their properties with proper notice, but many don't think it could happen
to them," says the local insurance broker. "I never tell the landlords what
to do, but I know that if I was a property owner, I'd inspect the
premises." These damages have cost the insurance industry a considerable
amount over the years, he says.

"I couldn't put a figure to it but a large number of claims have been paid
out," he says.

Much of the damage in a grow-op property is caused by the moisture,
watering and fertilizing that the plants need, adds the insurance broker,
who requested anonymity for fear of reprisals. "Some insurance companies
are viewing grow-op properties as illegal operations and will deny the
claim on that basis," he says.

There are several telltale signs that a residence or property is being used
as an illegal marijuana grow operation. They include indicators that the
house is not going to be used for residential purposes: * Rent is paid 2-3
months in advance and in cash * Renters refuse to sign rental agreement *
No references supplied * Walls removed to make more space * Electrical
bypass assembly with lots of wires * Moisture damage * Window coverings in
place all the time * Condensation on the windows

"If you put some of these elements together, it usually signals that
something is amiss," says Ms. Darke. "That's why it makes sense for
landlords to conduct regular, physical inspections of the premises. They
can even establish the practice of accepting the rent in person." The
insurance officials agrees.

"There's a lot of it going on," says the broker. "I feel sorry for
landlords. When are they going to realize that they're really at risk?"