The risks of owning a former grow-op
Photo by Drew Taylor via Unplash
Nice price tag? Consider these risks
Here in British Columbia, it’s not uncommon to come across a former grow-op while on the house hunt. Although former grow-ops can have appealing price tags, there are some risks to be aware of before you call 420 High Street home.
One of the most common risks to owning a former grow-up is mould and asbestos. In fact, even a small-scale grow-op with only a few plants can cause significant moisture damage. Chemicals, pesticides, and fertilizers used for cultivation can also contaminate the plumbing, walls, and flooring, leading to further structural issues.
Cultivating cannabis indoors also requires ample lighting, which means that additional electrical wiring may have been added. Due to the (previously) illegal nature of grow-ops, it’s safe to say that any electrical work done would not have been inspected for safety. This can pose a real risk for house fires and other electrical issues.
Aside from structural problems, owning a former illegal grow-op can also present serious safety and security risks. Largely due to the address previously being associated with organized crime. This means that there may be a higher chance of criminal activity like break-ins and home invasions.
Financing and insurance
Due to these risks, it can actually be difficult to qualify for a mortgage on a former grow-op. In fact, most lenders in Canada will not finance grow-ops, deeming them too high a risk. In these cases, buyers will typically need to seek financing from credit unions or private lenders, as opposed to traditional banks. Even if a lender is willing to lend you money, they will only do so if the property has been fully remediated and it will likely come at a higher rate than normal.
Like mortgage lenders, insurance providers are also unlikely to offer standard coverage on former grow-ops, making it difficult to obtain home insurance. If you do manage to find a provider willing to offer home insurance, there’s a good chance that they will require multiple inspections before providing you with an insurance policy.
While there are many risks associated with owning a former grow-op, this shouldn’t deter you. As long as you are aware of the risks, understand the limitations with financing and insurance, and do your due diligence with your realtor, owning a former grow-op can be a budding opportunity to enter the market at a below-average price.
Hunting for your next home? Give us a call and let’s make it a joint effort.