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Oct 19, 2017

Former "grow-ops" hard to spot for real estate buyers

Understanding the history of a home before making a purchase is important for many reasons. While some things are easy to detect, other serious issues may not emerge until after the transaction is completed. One such issue that has come to the recent attention of lawmakers pertains to houses that were once growing operations for marijuana. Real estate buyers can have trouble identifying these properties, known as "grow-ops," until after a deal has gone through.

In Limoges, Ontario, a woman bought a former grow-op unknowingly. The real estate was purchased as an investment, but the bill to clean up the damage from the past owners has now surpassed $30,000. Long-term indoor pot-growing operations can leave serious damage that may not be initially apparent, including mold in the walls and structural damage from adjustments made to vent the structure.

The provincial government has previously discussed legislation to create a provincial registry of former grow-ops which homeowners and prospective buyers can consult. However, nothing has yet passed on a provincial level, and such disclosure is left up to municipalities. In Ottawa, the police publish a public list of dismantled grow-ops. Bylaws also require damage to be fixed by the person charged with running the grow-op so future buyers are not stuck with major repairs. Once the home passes a city inspection, the home is removed from the list despite the risk of long-term damage being missed in immediate repairs.

In such a competitive real estate market, some home buyers rush into a purchase without getting a thorough inspection. The recent case in Limoges, Ontario, should caution people to be very careful and to talk to neighbours about a building's history before purchasing a home. A lawyer can also help real estate buyers and sellers understand disclosure policies and the possibility of conditional purchasing agreements.

Source: CBC News, "'Spot the grow-op' no easy game for homebuyers", Susan Burgess, Oct. 5, 2017