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Meth Solutions Interview Part Two

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So if was discovered that a house had been a meth lab, would it go on a LIM report?

Miles Stratford: Yeah, if the authorities are involved, then yes, it does go on the LIM report. So the process there is if the police identify it, they will send a letter to Council or the territorial authority. Then the Council will send out a requisition or put a requisition on the property and notify the owner to address it.

Now some Councils around the country are still in the habit of taking it off the LIM once the cleanup has been done. We’ve gotten involved with an Auckland Regional Meth Working Group, and through that, I understand the Auckland Council had a legal opinion that says it has to stay on the LIM report. So what effects has that had? In some instances, people have bought a property, post-remediation; therefore, it’s come off the LIM report and then when they’ve gone to sell that property, the new people looking to buy have actually got a LIM report, and it’s on there.

So, you know, imagine being the owner of that property.You bought it, not knowing there was a problem. Before you actually bought the property, the Council were notified there was an issue, but their policy meant it came off the LIM report, so it’s a little bit strange, some of the stuff that’s gone on, that’s for sure.

So getting it on the LIM report, it’s really up to the police, is it, to hand it over to the Council?meth recovery

Miles Stratford: Primarily, yeah. I think that as awareness around the issue has grown, more and more buyers have been getting the testing done. Some of those buyers, where they have been unhappy with the performance, as far as the agent is concerned or the vendor, have reported it through to the territorial authorities and provided copies of reports through to the territorial authorities, because they have concerns for public health. But primarily, the route to getting onto the LIM report is through the police involvement.

 

There are a million plus properties in New Zealand, what are the chances of me buying a property that was once a P-lab?

Miles Stratford: It may sound like a grand statement up front, but 40% of the properties that we’ve tested have had meth in. And that is a fact. It’s more than 40%. Does that mean that 40% of the properties in New Zealand have meth in them? No. I don’t really know what the number is going to be, but from a prospective purchaser’s perspective, there are some risk factors to take into account. So 75% of the labs that the police find, for example, have got an investment property history.

So if it’s got an investment property history, there is a higher risk. The potential purchasers can pop around and have a chat to the neighbours, that won’t cost them anything. Find out what they know about the history of the place. Bearing in mind that if the neighbours are really good friends with the people who lived there previously, and everybody was involved with meth, they don’t like to say too much against them.
So it’s part of the due diligence process you’ve got to go through.

 

Getting a house tested for meth use is really an insurance policy for potential buyers isn’t it?

Miles Stratford: Well, it’s certainly insurance. I have lots of conversations with people who bought problems,in those instances, it’s devastating. Often people will stretch themselves financially to get into a property, which means there’s limited cash reserves available. Then they find out that there is a problem with the property, and they don’t have the money to fix it.

So if they don’t have the money to fix it, they might think, “Well, let’s go to the bank and get some money off the bank.” The problem is that a property that’s got a meth history or a significant meth problem isn’t typically worth as much as the bank gives you on it. So often people would find themselves in a situation where the bank actually asks for more money, as opposed to handing out money to get the thing fixed up.

So you really do need to find out beforehand. If it’s an investment property, and somebody’s buying it as a prospective investment property, it makes absolute sense to get it tested, because actually, you’ll be able to rent the property out for more, because you can market it as definitely not having a meth problem. With the growing awareness that’s out there in the community it means that people are prepared to pay more.

Do landlords understand that testing for meth is to their benefit?

Miles Stratford: Oh, we’ve got landlords who are actively doing it. And we’ve got, for example, up in Auckland, the approach that we talk about is meth management, and ultimately, that’s where MethSolutions wants to get to is focusing its effort on preventing problems from happening, rather than what we’re doing at the moment which is just detecting the ones which have occurred. So meth management is a combination of ongoing testing for use and monitoring for manufacture, instead of getting $300 a week, they’re getting $315.

Not everybody’s bought into that yet, and it’s obviously looking at life a little bit differently, but you know, we have got some evidence that it can be achieved, as long as people commit to the process.

Find Out What To Do If You Suspect A P-Lab as well as How Much Testing Costs – Part Three Meth Solutions Interview


Meth Testing: What You Need To Know

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An Interview With Miles Stratford From Meth Solutions – Click below To Listen.

Introduction To Meth Solutions

We set up Meth Solutions in October 2012, we have sampled nearly 1400 properties around the country and over 40% of those had meth in them. So for anybody who’s looking for a house, meth risk and residues is one of those things that is a very quick route to undoing wealth and value, and it’s the sort of thing that you need to be aware of before you go unconditional on a property, not after.

So why is meth in property such a problem these days?

Miles Stratford: It’s a number of reasons. I mean the principle reason why meth in property is a problem is down to health. Even use-related residues of meth can produce adverse health effects. If a lab is located in a property, those health effects can be very profound and long-term. What seems to happen with meth residues in a property is that chemicals that are associated with manufacture, in particular, will catalyse problems and complications with the central nervous system, breathing issues, and cancer is accelerated within people.
It gets put down to all sorts of things before people get down to meth residues.
It is a hidden issue, so more often than not, you don’t actually see any outward sign of there being a problem with the property.
Unless the police have been involved, the likelihood it would have been noted on a LIM report is very, very remote.
So a standard due diligence process that doesn’t include some provision for meth testing is highly unlikely to pick it up.

What are the long-term effects if someone does end up buying a property that’s been a P-lab?methamphetamine

Miles Stratford: The principal issue is their health, and the impact and the adverse impacts that it can have on health. Because it has that potential to impact on health, if you want to get a property back into a habitable state, then you’ve got to spend a lot of money doing that.
So you could be looking at a cleanup and decontamination bill that’s somewhere between $20,000 and $30,000, as a standard refit out, same sort of money again, and then quite a lot of money on the testing either side.
The actual cost if you buy a problem are significant.

You then have got the ongoing issue that you’ve got a property that’s had a meth history.
If you paid market rate for a property that’s got a meth history, on the assumption that you’re going to do the right thing and disclose it when you come to sell it, and again, lots of people don’t, then the ongoing stigma means you’ve got a compromised sell value.
If you pay the right price for it at the time you purchased it, so it reflects the meth history, then your appreciation will still be relevant. But if you pay market rate for it, then you find you’ve got a problem, then you may find that you’re actually going backwards. It’s a long way before you start going forwards, financially.

Are there any easy ways to pick whether a house has been a P-lab or not?

Miles Stratford: As self-serving as it may seem, the easiest thing to do to try to pick it up is to get a test done. We can talk economics at some stage if you want to, but often people think that’s hundreds of hundreds of dollars, and it doesn’t have to be. Now the reason I say that’s the easiest way of doing it because often that’s the way the police pick it up.

Police, when they go and raid a property, will observe it for some considerable period of time, and they’ll kick the door down, because they know there’s something going on within it. And therefore they find the evidence that’s associated with the manufacture process.
More often than not, when the property is up for sale, for example, or when it’s being tenanted, property manager’s under the Residential Tenancies Act, they give the tenants 48 hours’ notice to access the property.

It’s the same process when a property is up for sale and as a consequence, the evidence tends to get cleared away. In many instances, the evidence is masked by a coat of paint or an extensive cleaning job has gone on. So the obvious tell-tale signs that might be associated with a historic meth issue are more often than not gone.

Are P Lab houses listed on a LIM Report Click here to find out – Meth Solutions Interview Part Two