Meth testing is now an essential due diligence item as part of a buyers pre-purchase checks. It’s a sad fact that the prevalence of the drug P (Methamphetamine) in our society means property buyers can no longer keep their head in the sand when it comes to the inclusion of methamphetamine testing in their pre-purchase due diligence.
I’ve already talked in this blog about the rising costs of due diligence and the pressure some buyers feel to skip steps in order to beat out competition or cut pre-offer costs. That is understandable, but, in my view, is too risky.
When it comes to meth or “P” testing, too many buyers assume they can judge whether or not a property has previously been affected by meth use or production by its appearance, or the surrounding neighbourhood. It’s just not true.
So-called “P” houses can be found in any neighbourhood and can look as well cared for as any other house.
Given that use and distribution of this drug would appear to be more and more prevalent, by not testing a property before purchase, buyers are exposing themselves to an extremely expensive clean-up process. Or worse, significant health problems for themselves or their tenants.
The clean-up cost for an average three-bedroom house starts at around $4,000 if P was being used but not manufactured in the house. If the property was used to manufacture P, the clean-up cost involved can be significantly higher. In serious cases the house will need to be demolished.
A property where P has been used or manufactured is likely to be contaminated with dangerous chemical residue, which can cause serious health effects. The long term effects of the chemicals produced from cooking meth will only be known once the people exposed to them start to experience unusual health problems. However, short term effects include asthma-like symptoms, breathing difficulties, skin rashes, eye irritations, headaches and nausea.
As some people are more sensitive than others, one person may be entirely unaffected while others suffer from the symptoms. Here are some indicators of possible meth lab activity:
- Strange smells
- Property vacated by tenants in a hurry
- Chemical stains around household kitchen sinks, laundry tubs, toilets and/or storm water drains
- Yellow/ brown staining of interior floor, wall, ceiling and/or appliance surfaces
However, the best way to tell if a property has been used for meth production is to get a test done by a local, reputable meth testing company to verify that the property is free of meth contaminants. Initial swabbing by specialists, costs approximately $100-$500 to detect meth on building materials and house contents. Scientific lab tests reporting on atmospheric levels can cost around $2,000.
When it comes to rental properties, the Tenancy Tribunal considers letting contaminated properties to be a breach of a landlord’s obligations. Therefore, a landlord must professionally decontaminate any contaminated house and have it tested to check that any remaining contamination is at an acceptable level before it can be re-let.
In other countries testing for other contaminants or faults such as termites or dampness are a common aspect of due diligence. Testing for meth in New Zealand should not be seen any differently in terms of the lasting impact on your investment.
When we bring up issues such as the need for the different types of due diligence around purchasing property, real estate companies are often asked if there’s something in it for us; if we somehow take a commission from such recommendations. The answer to that is categorically no. If a sales consultant is somehow connected with someone he or she recommends they must declare it to the prospective buyer.
What we do believe in is trying to ensure buyers have all the best, reliable information at their disposal before signing the sale and purchase agreement.
Given the costs associated with testing, buyers obviously need not have every house you’re considering meth tested, but as you close in on the property that interests you most, it’s important to think about the long term. You may save several hundred dollars now, but what may it cost you further down the track?
SOURCE: Some detail supplied by The Real Estate Institute of New Zealand