Put down that Mistletoe! PAY ATTENTION! You need this information immediately!
Unfortunately, we have not been properly informed about the down side of the legalization of growing cannabis. I feel compelled to help my friends and clients to better understand the consequences of what we have been led to believe.
We all know it’s now legal for Canadians to grow cannabis in their own homes. But did you know that even though it is legal, it is NOT a good idea!? There has been a lack of guidance when it comes to issues around remediation. Homeowners who have grown cannabis in their home are in for a terrible shock when it comes time to sell their home. Lenders’ and insurers’ may be reluctant to take a risk on a home where cannabis has been grown.
If cannabis is being grown for harvesting, its light, water and nutrient requirements are much higher than other plants. Because cannabis produces a lot more of its own moisture, growing cannabis could significantly increase the potential for mold in your home.
Will cultivating cannabis plants at home effect the sale of my home?
Even if only up to four plants are being grown, it is quite probable that choosing to grow cannabis will make it harder to sell your home
Many lenders and insurers have said they may avoid homes where cannabis has been grown. Because of this, potential buyers might have trouble getting financing or pay higher premiums for home insurance. These factors will impact the purchase price buyers are willing to pay.
Homeowners are asked to declare whether cannabis has been grown on the property illegally when filling out the Property Disclosure Statement (PDS). But, if cannabis has been grown legally and this has resulted in a defect, like mold, this must be declared. The PDS has recently been updated to reflect legalization of cannabis.
Will growing at home impact my mortgage?
It can. Some lenders have reported that they will not offer mortgages on homes where cannabis has been grown. A Dominion Lending website reviewed by BCREA notes that as of October 11, 2018, they only had one lender willing to finance such a home (with an additional one per cent premium). This won’t just impact resale prospects; homeowners may face problems when they have to renew their mortgage.
Even if growing at home causes some damage, I have insurance that will cover it, right?
No. The Fraser Valley Real Estate Board’s safegrowhomes.ca website says this:
“The BC Automobile Association (BCAA), which offers home insurance as well as automobile insurance, says home insurance in Canada does not cover any loss if the premises are used for cannabis activities.”
That’s not all. BCAA flat-out will not cover any loss to an insured home if the home or another detached structure or property is used to grow cannabis. This applies even if the loss is completely unrelated to cultivation. Homeowners and buyers need to have frank conversations with insurers if they intend to grow at home or buy a property where cannabis has been grown in the past.
Is there a safe way to grow?
Right now, there are no guidelines on how to safely grow at home. There are also no guidelines on how to remediate a home where cannabis has been grown. BCREA and the province’s 11 regional real estate boards have asked the provincial government to provide peace-of-mind for homeowners and buyers by clarifying what makes a grow home a safe home.
For more information on issues related to cannabis cultivation for homeowners and renters, visit Fraser Valley Real Estate Board’s website: safegrowhomes.ca.
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