Methamphetamine & Real Estate

Meth contamination in properties for sale – what you need to know.

Looking to get on the real estate ladder? One of the biggest things you need to consider is meth contamination in properties for sale. Thanks to differing guidelines on meth levels between the Ministry of Health and findings from the Gluckman report, there’s a lot of confusion out there for house hunters and landlords alike.

I experienced the confusion this issue causes first-hand with a house I recently listed. While there doesn’t seem to be a quick fix to this problem, there are things you need to be aware of. In this blog, I look at the grey areas surrounding meth contamination in properties for sale and what you need to know.

The Ministry of Health vs The Gluckman report – conflicting meth contamination guidelines

When meth is produced (“cooked”) or smoked in a property it leaves behind highly toxic chemicals which can only be removed by a specialised decontamination process. These leftover toxins remain in the property for many years to come, causing a range of health issues.

To address this growing issue, the New Zealand Ministry of Health stipulates any property that tests positive for methamphetamine at levels over 1.5 micrograms per square metre must be decontaminated and cleaned.

However, in 2017, an independent report by risk assessment analyst Sir Peter Gluckman found that houses with meth levels of under 15 micrograms per sqm posed no serious risk.

Conflicting guidelines – who do we listen to?

Here’s where things get tricky.

In response to the Gluckman report, Housing NZ immediately put over 200 contaminated homes back into the rental pool without having to decontaminate them as they would have had to under the Ministry of Health guidelines.

In October 2018, the Tenancy Tribunal confirmed that they would also follow the Gluckman report and accept 15 micrograms as the minimum standard for meth contamination in rental properties.

I researched further and contacted the Real Estate Authority, which is the governing body for agents in New Zealand to see what their position was on this serious issue. I was greatly surprised to hear that they too had accepted the Gluckman findings.

A case study – confusion over meth contamination in action

Recently, I got to experience the confusion and frustration caused by this conflict of guidelines when I listed and sold a house that had tested for 6.65micrograms per sqm.

This level was well above the Ministry of Health guidelines, but well under the Gluckman recommendations. As you can imagine, this created a real headache for everyone involved.

  1. The purchaser wanted the vendor to rectify the contamination as part of the Sale & Purchase Agreement.
  2. The vendor disputed that they needed to decontaminate and clean, referring to the recommendations of the Gluckman report.
  3. The purchaser argued his case by sticking to the Ministry of Health guidelines.
  4. To further complicate matters, we discover that many banks and lenders will not loan on properties that test over the Ministry of Health guidelines 1.5 micrograms per sqm.
  5. Many insurance companies also go by the Ministry guidelines and will not insure a meth contaminated house over 1.5.

In the end, our purchaser bought the property as is where is at auction for a price which allowed him to correct the contamination.

Meth contamination in properties for sale – important takeaways

For Buyers:

  1. Ask the question to the agent if the property has ever tested positive for meth
  2. Always get a meth test as part of your conditions in a sale & purchase contract – even if you have been told it is clean
  3. Appearances can be deceiving – just because the house was previously a family home doesn’t exempt it from meth contamination. Meth is often cooked and smoked in homes where children are present.
  4. Be aware, there may be differing guidelines, but many banks, lenders and insurance companies may not deal with houses that test for meth levels over 1.5 micrograms per sqm.

For Landlords:

  1. Always get a meth test before tenants move in, and then again when they move out. That way, if any of the tests come back positive you know conclusively which tenant is responsible and you can act on it through the proper channels.

For Vendors:

  1. Consider getting a meth test when you list your property for sale and make it available to the purchasers, this will eliminate any potential issues or nasty surprises.

Buying real estate is a huge investment. It’s one of the biggest purchases most of us will ever make, so I can’t stress enough how important it is to be aware of any potential issues, before you dive in.

If you’re looking to buy a home or a rental property, make sure you do your due diligence and ask for reliable advice when you need it.

If you do have any questions around meth contamination in property for sale, don’t hesitate to contact me, I’m happy to help.

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