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Mortgage Matters

Grow-ops: What’s up in smoke?

Few communities in Canada have escaped having a grow-op found in their midst.

Once busted, the cost to clean up the consequences of having a grow-op in the home varies from community to community, depending on how active local authorities have become against drug trade.

Financing may be an issue (even mortgage renewals).

If you already own the property and it has become public knowledge that it was a grow-op, when your mortgage comes up for renewal, the financial institution holding the mortgage is not obligated to offer you renewal terms.  The lender may demand the balance in full.

Many mortgage lenders will not offer financing on properties that once housed a grow-op. There is an environmental risk associated with former grow-ops that causes concern. Mold spores can remain dormant for years. If they were not properly eradicated there may be a future risk of regeneration of mold. Warm, moist conditions can allow dormant spores to regenerate. The lender may become responsible for the environmental cleanup when the mold starts up again.

When lenders learn of an issue regarding the property after they have given an approval, if that information would have caused them not to offer an approval before, had they known – they may refuse to complete the mortgage transaction. 

Buying a former grow-op at a bargain price will need significant investment cash. Usually, while in its discovered state, you will need Equity financing. It comes at a higher price in lender fees and interest rate. Additionally, you will need the cash resources to make the necessary reclamation. Once the house is inspected and found clear of mold and spores, some lenders will provide refinancing or will allow for purchaser financing. You will need a proficient mortgage broker to lead you through the transition of purchase, improve and refinance or sale.

Here is a question to consider should you be considering the purchase of a former grow-op. What if the future occupants have compromised immune systems or asthma?  Who carries the legal and ethical guilt, if the toxicity of regenerated mold causes a death?

To protect your neighbourhood, watch for:

  • Next door is moving in with unrecognizable equipment and not many household furnishings
  • They move in with copper and/or PVC pipe, soil, halogen lamps, ducting and plastic sheeting
  • They come and go but never seem to stay overnight
  • Little or no garbage is brought to the curb each week
  • Windows are dark, and may be secured with metal bars, blacked out or heavily draped
  • A strong odor similar to skunk cabbage comes from the building
  • Power meter spins at high rate of speed or is stopped but the lights are on.

 

In all cases, if you suspect something, please report it to police. Take no other action. Stay safe.

If you are considering the purchase of a former grow-op please give me a call to discuss your financing options.



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About the Author

April Dunn is the owner and a Mortgage Broker with The Red Door Mortgage Group – Mortgage Architects. She has been assisting clients to purchase, refinance or renew their mortgages for over 20 years. With experience as a Credit Union manager, a Residential Mortgage Manager with a large financial institution and as a licensed Mortgage Broker. By specializing in Strategic Mortgage Planning she has the tools available to build a customized mortgage plan, with the features and options that meet your needs. April provides a full range of residential and commercial mortgage financing options for clients all over the province of British Columbia and across Canada through the Mortgage Architects network.

Contact e-mail address: [email protected] or by phone at:  250-826-3543

Website:  www.reddoormortgage.com




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The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet presents its columns "as is" and does not warrant the contents.


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