Home Buyers Face Hard Time Purchasing Former Cannabis Grow-Op Houses

It’s not just cannabis growers that face a stigma, the houses they use carry a mark long after the operation has closed up.

A Duncan, B.C. resident said he thought he had found the perfect home to move into to spend his golden years, but, when banks and lenders learned the house had been used by the previous owner as a legal, Health Canada licensed grow, his dream home turned into a nightmare.

“I’ve had to go through so many hoops over the bloody thing that last night I ended up saying … I’ve had enough and they can shove it up their wherever and I’m done with it,” said the man, who wished to remain anonymous.

Although he admitted he later wrote back to his mortgage broker to try and move the deal forward again, the frustration he felt was real.

“None of the banks will loan you money to buy one of those houses, they just won’t do it, and those that do make it very difficult for you,” he said. “There’s a stigma, there’s no other reason. Institutions just say ‘Oh, a grow op, it’s got to be unhealthy!”

Mortgage Brokers Association of British Columbia CEO Samantha Gale said money lenders, like banks and credit unions, don’t want to take on an unknown liability.

“If a house has a history of being a grow-op there might be questions about how safe the house is, if the house has been exposed to hazards, moisture damage, and, even if it’s been remediated, there may be some residual impact,” said Gale. “It’s the lack of clarity around what’s happening to that property that creates the risk.”

That lack of clarity comes from an absence of standards set in place across the province for what constitutes a “drug-house” and what remediation steps are necessary before the property is no longer stigmatized for its past use.

British Columbia Real Estate Association Government Relations manager Norma Miller said establishing these provincial guidelines has been a goal for the past several years.

“There aren’t any consistent processes around disclosing that information around the province,” said Miller. “It rests with the local government and there are various procedures, no consistency and a lot of them don’t have remediation standards either.”

Miller said if these standards were in place, it wouldn’t matter if a house had been used as a grow-op or not by the previous owners, it could be remediated to a set standard and then its past activity would be negligible to insurers and mortgage lenders.

Gale echoed her ideas and suggested a registry be put in place for former grow-op houses.

“When it’s been cleared and it’s been fully remediated and the municipality has hooked the hydro up and they’ve tested it and it’s clean, it’s on the registry as being remediated and it’s safe,” she said.

Even as cannabis becomes legalized, the issue of homes being used to grow personal and medical marijuana is widespread and Gale said, without disclosure by the previous owners, many home buyers will have no idea that the last tenants grew in the house.

“I don’t think it’s that unusual in the neighbourhood to have a house that’s maybe grown one plant, or maybe the whole basement, or maybe it’s in the garage,” said Gale. “Sometimes you’ll go in and you’ll see special electrical has been done and the only conclusion you can draw is that the building was used as a grow-op but, other than that, there’s no evidence.”

“I think there are probably a lot more grow ops, or former grow-ops, than we really think.”

The Duncan homebuyer said he knew full well that the house was used as a grow-op in the past and had no problem with it, inspectors also found no evidence of mould or other damages.

“They haven’t done any research into people running a decent grow-op,” he said. “I know, definitely, that damage can be done, with heat and moisture, but in a properly regulated, licensed grow-op there really shouldn’t be any stigma — you gave the person a license.”

The home buyer, who is in his 60s, is worried that the stigma of the home will follow with him regardless of a lack of current cannabis related activity in the house.

“Let’s say I live another five years and I want to leave this house to my kids, and they decide they don’t want to live in it, but they want to sell it. So there would have been no grow-op in that house for seven years, and the house has been remediated,” he said. “Why would it still be considered as a house that had a grow-op?

“At some point the punishment must fit the crime. Whats’ the statute of limitations on a grow-op?”

Gale said in after 20 or 30 years she couldn’t see lenders caring about the history of the home, but Miller disagreed, saying that, until standards are put in place, there’s no time limit on the history of the home having an impact for insurers.

The homebuyer, who is hoping to close the deal early next month, had a recommendation for his children if they ever try to sell it again.

“Don’t check that box, don’t tell anyone it was a grow-op,” he said. “That the stigma of a grow-op will go onto you and whoever else once you’re finished with the house.

“It literally can’t be removed, that reefer madness is still alive and well.”