Leading tech entrepreneur Nick Lyons (pictured) has revealed the nightmare of discovering a cannabis growing operation within a property he rents out – and has some lessons to share.

He is CEO of inventory platform No Letting Go and a property compliance and inspection expert.

He claims his handful of South London rental properties are run very tightly and looked after by reputable agents. But despite all his precautions, he recently discovered a fully-operational marijuana factory in one of his flats, the repairs for which will cost £10,000.

Everything seemed in order

The property is on the third floor of a block in Southeast London. Four years ago, his letting agent found a new tenant after the previous one moved out. The tenant was referenced, insurance was taken out, and everything seemed in order.

The tenant moved in, paid his rent on time, and allowed mid-term inspections, often without being present, having given the agent permission to enter.

The first sign of any trouble came a year later when neighbours noticed the windows were blacked out with paper. They raised concerns and called the police and the agent to investigate.

This happened several times. On each occasion, the agent conducted an inspection, and the police spoke to the tenant, but nothing appeared amiss.

The tenant explained that he worked nights and blacked out the windows to sleep during the day. It seemed plausible, so no further issues were raised.

Good track record

For the past 12 months, though, it transpired the letting agent had been unable to complete any inspections but because of the tenant’s good track record, no action was taken.

It wasn’t until 2024 that it all came to light. Lyons received a call from the estate management company informing him that the fire brigade had been contacted because water was leaking into the flat below.

As no one was home, the fire brigade forced entry to stop the water leak and discovered the source—an irrigation system malfunctioning in the flat.

Inside was an elaborate remotely-managed marijuana operation, with plants, chemicals, grow bags, water filtration systems, and a tangle of venting and heating equipment used for growing and harvesting.

The most important takeaway for landlords and agents is the value of thorough documentation.”

The police told Lyons it was unlikely anyone would be charged, as finding the responsible individuals was low priority and the tenant claimed he had sub-let the flat and had no idea what was going on.

Lyons says there are lessons to be learned for landlords and agents from his experience. He says: “This case should have raised red flags. The agent should have arranged to meet me at the property if access was repeatedly denied.

“Had this been done earlier, we might have discovered the problem before it escalated.”

Insurance and deposit protection protection

“Fortunately, some costs will be covered by insurance and the deposit protection scheme. Detailed inventories, mid-term inspections (up until the issues started), and an independent check-out – all logged through Kaptur software – are crucial pieces of evidence.

“The most important takeaway for landlords and agents is the value of thorough documentation. Evidence is essential, not only for deposit claims but also for insurance purposes.”