Buying A Grow Op Property That’s Been Remediated
Did you find the right home only to discover it was once a marijuana “grow op”? Here’s a few things you should think about before buying a grow op property that’s been remediated.
Buying a grow op
How do you find our if the property was a grow op?
In British Columbia, the property disclosure form and the MLS listing must indicate if this is the case so make sure you talk to your real estate agent about it. You can also contact the RCMP, City of Nanaimo or Health Canada (they have regulations regarding illegal grow ops).
Financing a remediated property
Most major lenders in Canada are extremely reluctant to finance former grow ops. Usually a local credit union is your best bet, but they will probably charge higher interest rates. You may get a great deal on the purchase price of the home, but that can be quickly offset by your increased carrying costs. Also, a lender will likely only provide financing if the home has been fully remediated. You’ll have to provide them with a satisfactory Phase I Environmental Assessment, as well as a re-issued Occupancy Permit from the municipality where the home is located.
Other factors to consider
- Once it’s known to be a former grow op, the information has be disclosed to any potential buyers. This will turn off a lot of people because of the stigma around it. As a result, the home’s value may decline which is also part of the reason traditional banks don’t like to finance them. The concerns you have today are the same concerns future buyers will have and the selling price of the home will reflect that.
- It may make it more of a target for break-ins. Your safety and security are most important, so think about this before you make the decision to buy.
- Home insurance may also be difficult to obtain. Before making the final commitment to buy, talk to your insurance agent about whether or not you’ll be able to secure appropriate coverage.
If you’ve found the home you’ve been looking for, to live win or as an investment, and it happens to be a former grow op, make sure you go into the purchase with your eyes open, and with as much information as you can possibly find.
The City of Nanaimo is working in partnership with the RCMP, Vancouver Island Health Authority, Social Services and other Provincial Ministries to deal with the problem of grow ops. You can call the Bylaw Office at (250) 755-4422 for more information, or email them at [email protected].
If you have more questions or need help finding the perfect home, call Scott Parker at RE/MAX of Nanaimo today at (250) 751-1223.