Step away from that gummy bear and pay attention. You need this information immediately!
We have not been adequately informed with regards to the legalization of growing cannabis in your home. It's important that our clients understand the consequences of making an error in our perception of Canadian laws and real estate.
It’s legal for Canadians to grow cannabis in their homes. But we have not been given the education to make informed decisions about "growing our own."
There has been virtually no information offered in regard to the issues around remediation. Homeowners who grow cannabis and those who rent their properties to tenants that may grow cannabis, are in for a terrible shock when they want to sell their home or property. Lenders’ and insurers’ appear to be reluctant to take a risk on a home where cannabis has been grown.
Cannabis being grown for harvesting, requires a higher threshold of light, water and nutrients than other plants. Cannabis produces a great deal of its own moisture, so growing cannabis could significantly increase the potential for mold in your home.
Cultivating cannabis plants can affect your ability 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 can impact the purchase price buyers are willing to pay when you attempt to sell your home.
Homeowners are asked to declare whether cannabis has been grown on the property illegally when filling out the Property Disclosure Statement (PDS). 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.
How will growing at home impact my mortgage?
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.
I have insurance that will cover any damage caused by growing at home, 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?
There are no guidelines on how to safely grow at home, right now. There are 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.