Real Estate....."Old marijuana grow ops can be great deals for home buyers"

Getting a deal on a property once used to cultivate marijuana in the basement isn't a problem as long as you know the house is safe, say purchasers of former Whitehorse grow-ops.

Purchasers of homes that contained marijuana grow operations shut down by the RCMP in the fall of 2005 said they had their houses inspected before they bought and are confident the properties are safe.

Lindsay Schneider said she and her husband were told by the real estate agent that the house had been used as a grow-op and didn't have a problem with it.

"We ended up getting it as a good deal because it was labelled a drug house; we were happy," Ms. Schneider said.

She said the bank she and her husband received financing from required the couple to have the home inspected before they could get a mortgage and the property came out with a clean bill of health.

Ms. Schneider said the former property owner paid for the engineering report and the fact the house was used as a grow-op was listed as an item on the property disclosure form at the time of sale.

City council has discussed enacting a bylaw on properties that have been used for drug purposes. It would give municipal workers the authority to enter and inspect properties that have been investigated by authorities for drug connections.

John Taylor, the city's manager of bylaw services, said the proposed bylaw would give the city the authority to bar landlords from renting out their properties until they were fixed up to safe standards.

Bill Roberts said has no problem with the fact that his home was used for the production of marijuana because he had several engineering reports done on his property and is confident it's safe.

"We were lucky, I don't know if you know about this house but this particular place only had an operation for a very few months and it was all in tents. All of the hydroponics were managed and the air flow was managed. I don't know about the other houses."

Mike Racz, president of the Yukon Real Estate Association, said houses purchased through real estate agents required sellers to disclose the grow-op information on a disclosure form.

"When we list a property, it's one of the questions on the disclosure form.

"It's a legal document. It's a way of getting a history on the property."

Mr. Racz said the fact a house was used in a marijuana grow operation often stigmatizes a property leading to a discount on sale price of as much as 10 per cent.

Maura Drew-Lytle, a spokeswoman for the Canadian Banking Association, said there are no set policies on people getting bank financing for the purchase of former grow-ops.

"Banks are looking at the borrowers and they're also looking at the property. They want to make sure if you're looking to borrow $200,000 from them, the house is worth $200,000."

Mark McInnis, vice-president of insurance underwriting, servicing and policy with the Canada Home and Mortgage Corp., said his organization has a policy of paying insurance claims to lending institutions such as banks that have issued mortgages for houses that end up becoming grow operations.

"We believe the lender who made the loan had no idea it was going to be used for grow-op purposes."

Mr. McInnis said after paying the claims to lending institutions, it then pursues court action to retrieve the money from the individual who borrowed the money.

According to a March, 2007 study by CHMC, grow operations are an increasing problem across the country, leading several cities in Alberta and B.C. to enact their own grow-op bylaws.

The study of 12 grow-op homes in Canada showed that many properties suffered electrical, structural and mould damage that on some occasions had to be paid for by unsuspecting home buyers.

The CHMC report recommended several measures, including national remediation requirements, grow-op specific environmental assessments and that detailed records of the required work be kept by mortgage lenders.

(prepared by Matt Grant/Canadian Press/Globe & Mail)