Living here in beautiful British Columbia has some definite perks. The mild climate, gorgeous scenary, and for those that like to partake…B.C. bud.
Now I am not getting into the debate over pot use but wanted to detail the steps required to purchase a property that was a former grow-op. In B.C. there seems to be a huge number of homes that are used for the illegal cultivation of marijuana. Once these places are shut down by the authorities or are known to have contained a former grow-op, selling and buying becomes much more complicated.
To start, the “stigma” of the property being a former grow-op stays with the property FOREVER in B.C. It must be disclosed on the Property Disclosure Statement by the seller regardless of how much time has past.
Now when it comes time to finance such a property there are many lenders that will not provide mortgages on them knowing what they were previously. Also, of the two major mortgage insurers (CMHC, Genworth) Genworth will not insure a mortgage on former grow-ops. They will only if the dwelling is bull-dozed and rebuilt from the ground up.
Luckily, there are still lenders and CMHC that will finance these properties. Here is what is generally needed:
- If the property was shut down by the authorities, a new occupancy permit must be issued by the city/municipality. Normally this would require that the property be brought back up to building code.
- An Environmental Phase 1 Assessment, which is an air quality test to ensure that there are no toxic mould or other harmful contaminents in the property.
The above two items are generally what are required. However, some lenders and also in some cases, an Enviromental Phase 2 assessment may be required. This is a much more extensive review of the property and would involve taking drywall samples, flooring samples, etc. Again to ensure no toxic mould or other harmful contaminents are present in the property.
Obviously properties of this type require a lot more work and documentation in order to obtain financing but it is still quite possible.
If you would like to discuss this further or have a comment I would love to hear from you.
Wayne Mah, AMP / Senior Mortgage Planner / email@example.com / 604.880.1899