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.
Read more Mortgage Matters articles
- Moving up or downsizing? Sep 13
- Grow-ops: What’s up in smoke? Aug 30
- Four things that can go wrong Aug 16
- Good debt versus bad debt Aug 2
- Credit & mortgages: a mystery? Jul 19
- Mortgage love for renovations Jul 5
- Mortgage renewal options Jun 21
- Planning a divorce? May 24
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