This past weekend I was flipping through the channel and landed on a popular HGTV show, Holmes on Homes.  The shows premise is to educate homeowners that hire shady contractors to renovate their home. When shortcuts are taken it leaves the homeowner in a possible dangerous situation. The episode that aired on May 30,2010 (and will air again on June 23, 2010 if you are interested), had a slightly different twist. The homeowner was actually renting out an investment property when the police raided it and called the owner to inform her that the tenants had been engaging in an extensive marijuana operation.

When they homeowner stepped into the house. It was destroyed, they had tubes from the vents going everywhere. There was a 2′ by 2′ hole in the wall. Not to mention the lights and humidity system they had established in the rooms they were growing the plant. From the humidity caused there to be extensive mold and asbestos. So she did what any of us would do, called her insurance company. She had a claim right? Wrong.

The insurance company denied the claim.

Why? Because illegal activity is not covered under by the insurance company. Since the owner did not do inspections on the home she cannot prove that she did not know that there was illegal activity happening on her property. Which is how the insurance company can deny the claim. One other important piece of information that was useful from this particular program was who pays for stolen electricity. The electrician on the program explained that the person who’s name is on the bill is the one who is responsible. So if you are renting a house out make sure that the bills are all in the tenats name.

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