The Calgary Journal
The Calgary Journal

Former grow op homes are a tough sale

Grow OpMarijuana grow operations — or grow-ops— can cause serious damage to houses.

Even though these properties can be remediated and brought back to good living standards, owners and realtors have trouble selling them. This is because they are labelled as stigmatized property and most banks will not offer a mortgage. While real estate agents agree that something needs to be done about this problem, there is concern about the having government deeply involved in real estate transactions.

According to a 2009 report prepared for the Alberta Real Estate Association, the damage caused by grow ops to a property can include everything from holes drilled in the foundation, ventilation systems being installed in stairs and ceiling, mould growth and rotting structures. Indoor air quality is also a major concern.

In these cases, Alberta Health Services (AHS) will step in and issue and executive order declaring this building "unfit for human habitation." As a result of that damage, all grow ops that are busted in residential homes and deemed uninhabitable, are placed a list on the Alberta Health Services site.

Depending on the property, grow ops could devalue the home by about $100,000 and remediation costs can reach $60,000. That remediation involves repairing damages to the foundation, electrical, clearing out the mould, and performing air tests.

Even though those properties can be brought up to AHS standards, Ed Jensen, president of the Alberta Real Estate Association, believes people are still nervous about buying a former grow op.City GrowOpRemidiation GroveED copy copyIt is possible for previous grow operation homes to be fixed to Alberta Health Services standards through remediation. However, buyers are still anxious about making the purchase.

Photo courtesy of Global News, Creative Commons Licensed

"From a buyers perspective they're worried about the health of their families and children when buying a grow op even if it's been remediated. There are lots of choices so why would I choose that?"

Bill Kirk, the immediate past-president of the Calgary Real Estate Board, says the potential buyers for former grow ops are limited to a small group mostly made up of cash buyers.

In an email to the Calgary Journal, a spokesperson for ATB Financial stated, "[The bank] does not offer mortgage financing for homes that are remediated grow-ops. These homes are regarded as extremely high risk as they are difficult or, in some cases, impossible to sell."

However, Scotiabank differs from ATB Financial and offers mortgages to buy remediated grow op homes but remain concerned because of the potential health risks even after remediation.

CIBC declined to comment.

A spokesperson for the Canadian Bankers Associations said in an email, there is no standard policy for former grow op homes and it is an individual bank's decision whether to offer a mortgage.
Jensen doesn't like the idea of the government controlling what business people can and cannot do, but he also wants a clear plan of action, whether it's fixing the home or knocking it down and rebuilding.

Kirk would like the provincial government to makes things more black and white instead of having a grey area as it is now.

"We want the MLAs and the provincial government to produce a method that says, 'If this has been certified as liveable the mortgage companies can't back away.'"

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Thumbnail courtesy of College of Cannabis. Under Creative Common Licence