“The price has been set as per the time of year,” Dimasi says. “If you look at Kew, there’s a lot on offer. It’s to make it more competitive.”
But what is the market price for a property that has – however unlawfully – been used as part of a drugs operation, and how much of its history should be disclosed? Dimasi says there’s no need.
“There’s nothing as far as the law goes around disclosing that it was marijuana, as far as I know,” she says. “The house hasn’t changed. There’s no damage as such that can’t be repaired.”
‘It’s a minefield!’
Disclosure is a dilemma for agents, who have to act in the best interests of their client, but also face a moral obligation – albeit with little backing in law – to be open with renters.
“It’s a minefield!” says Moira Maloney, a Canberra-based real estate agent.
“I would say ‘You need to be aware of this’. I don’t think you need to say any more about it. It’s up to them whether it is an issue or not.”
The rules around disclosure of risks and faults for rental properties across Australia are less onerous than they are for sales. Australian Consumer Law carries certain requirements.
“A deliberate failure to disclose a matter known to the landlord, and known to be important to a renter, risks breaching the ACL,” a Consumer Affairs Victoria spokeswoman says.
In Victoria, there is no obligation to disclose anything about a rental property. WA has no leasing disclosure requirements, nor does Queensland.
NSW is perhaps the strictest, with regulations stating landlords cannot knowingly conceal “material facts”. But even so, the onus lies with the renter.
“In the instance where an agent is asked by a prospective tenant about the recent history, use of or activity of a property, such as criminal or drug activity, an agent is required to disclose readily available information about the dwelling, a NSW Fair Trading spokeswoman says.
When it comes to rental houses, there are drugs and there are drugs. Houses formerly used as meth labs can lose about 10 per cent of their value and they also pose longer-term health risks, due the persistence of methamphetamine residue in the carpets and paint. Some states require properties to be free of chemical contamination and real estate agents typically require homes used as meth labs to be professionally cleaned before they are re-let.
Queensland’s Residential Tenancies Authority says the state government is reviewing the legislation with regard to disclosure about clandestine drug labs. Amendments to leasing laws in Victoria will prohibit landlords from making “misleading or deceptive representations” to renters.
Risks for owners
Marijuana doesn’t carry the same immediate health risks, but brings its own concerns, says Kate Saunders, a principal with Perth-based agency First National Druitt & Shead.
“The grow house one is a very complicated one,” Saunders says. “It’s not really health-related but social-related. You’ve got people that the new tenants have knocking on the doors at 11pm, 12am, 1am, looking for people or money. You wouldn’t put in a family with little kids. You’d avoid it.”
Of course, drug operations often choose homes in quiet family areas because they’re less likely to be rumbled.
“It’s funny how often that happens,” Saunders says. “They pick family areas.”
The risks for owners of having their home used for drugs are great, particularly in a weaker residential market.
“In a tight market where there are not a lot of properties, tenants are potentially going to overlook some issues, whereas in a closing market, like Perth has experienced, they just move on to the next identical property two streets away,” Saunders says.
“It can really render a property unrentable.”
Dimasi sees no risk of a loss in value, however.
“If it was a meth house that would impact the owner’s income,” she says. “This is a completely different situation.”
She points to the positives. The Kitchener Street house is next door to the local Kew East Primary School.
“The house has always been close to a good school,” she says. “Nothing’s changed as far as this particular property is concerned. The floorboards have been polished. It’s probably got a nicer floor than before.”
With Luke Housego