Grow-op nightmares

Buying a former Grow Op Property and Financing

I often get asked about the possibility of buying a home that was a marijuana grow operation or grow op for short. 

The price of these properties makes them attractive as they can be listed and sold far under market value. However, there are many things to consider in this kind of purchase. It's important to understand that once a property has been busted as a grow op, it will always need to be tagged as a former grow op even if it is 10 years later. This adds a negative stigma to the property.

Not only is it harder to get financing, but after a recent bust, there is always the danger of the property being mistaken by those involved in criminal activities.

The main danger with former grow ops is the presence; in 2014 CMHC and others had a conference to determine how to remediate the problem. The first thing is for a baseline condition to be determined by testing.

This is obtained by a home inspector who has qualifications to perform these special inspections. The inspector examines site conditions — exterior walls, foundation and roof, mechanical, electrical, plumping and interior structure. As well, air testing is conducted inside the residence to determine the presence of fungal growth/drug residue levels inside the residence compared to the outdoors. The drug levels must be less than the prescribed levels or the same as the exterior.

Once the condition has been determined then the remediation can begin. Again it is important that certified professionals are hired to do the work. After the renovations are completed, then there will be a post inspection with air-quality tests.

 The mortgages will need to be insured on these properties and this requires that the full renovation and decontamination be completed prior to funds being advanced. There is private financing available with a good down payment, if the property is in foreclosure and remediation cannot be performed prior to purchase. 

All mortgages for this type of property are approved on a case-by-case basis depending on the remediation and the strength of the borrower. Here are some of the additional documents that are required:

  •  Copy of occupancy permit
  •  Copy of post remediation home inspection
  •  Copy of Level 1 environmental assessment, including an air quality test
  •  Independent legal advise providing full disclosure of the risk associated with buying a former grow op
  •  Copy of RCMP/police report

In addition to this documentation, the client will have added fees and the interest rate may be higher to offset the risk. The purchasers must have good income, high credit score and a minimum of five per cent down payment.

The only way to remove the label of grow op from the property is to have the property completed rebuilt from the foundation. This means that each time the property changes hands the property disclosure statement must state that the property is a former marijuana grow operation and be provided to the subsequent purchaser.

For more information on former grow op financing please contact me at 250-862-1806 or email [email protected].


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About the Author

Tracy Head and Laurie Baird help busy families find mortgage solutions. Together they have more than 45 years of experience in the mortgage industry.

With today’s increasingly complicated mortgage rules, Tracy and Laurie spend time getting to know the people they work with and help them to better understand the mortgage process. They support their clients before, during, and after their mortgage is in place.

Tracy and Laurie work closely with their clients, offering advice and options. With access to more than 40 different lenders, Tracy and Laurie are able to assist with residential, commercial, and reverse mortgages in order to match the needs of their clients with the right mortgage package.

They work closely with their clients to find the right fit, and are around to provide support for years down the road!

Contact them at 250-862-1806 or visit http://www.okanaganmortgages.com

Visit their blog at https://www.okanaganmortgages.com/blog


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