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I had been showing a home in a wonderful community last spring and it just didn't work for the particular buyers I was working with. The layout was really nice, the location really good and the home was vacant and ready for immediate occupancy.

 

Well unfortunately, it has now appeared on the province's grow-op list.

 

Here's a link to the full list of former illegal drug operations (grow-ops and meth labs) that have been busted in the Calgary area. You'll see there are hundreds of homes on the list.
How many others have gone undetected, or undisclosed in a real estate transaction?

 

As a Buyer, know that it is the Seller's responsibility to disclose this information to their agent if it is know to them. The Seller's Agent will most likely disclose this information on the MLS® System (either publicly, privately to other agents, or both). Whether or not the drug operation has been remediated, it can argured that it's a "Material Latent Defect" and needs disclosure under common law. The damage caused by the operation may be visible and therefore not a "latent defect"; but, it will most likely be a "material defect" for the buyer. At this point in time, there are absolutely no guarantees that a "remediated" grow-op or meth-lab will not have issues resulting directly, or indirectly, from its former use as a drug operation. As a Buyer, for your peace of mind, you'll want to review this list prior to writing an offer on a home (at the same time as you review defects in the property's title in your determination of value). Obviously, this kind of stigma will affect the home for years to come. These are some of the items that I'm sure you're looking for your agent to help you with.

 

Some are now arguing that because the current remediation standards are so ill-defined that disclosure must not be mandatory. Currently, the direction is to NOT require mandatory disclosure by the seller on our MLS® System unless a home has NOT been remediated.

 

The issues in buying a former grow-op or meth-lab are many. Some that you should consider are:
  • The financial implication of the stigma. How much will this impact the home in value? $50,000? $100,000?
  • The potential return of mold - while a house will generally be remediated and the air quality certified, there are absolutely no guarantees that the house will remain livable.
  • The potential failure of the electrical system. Generally, the electrical meter has been by-passed during the time of the illegal activity. The issue with the electical system is that homes are designed to carry electricity to meet normal family occupancy needs. They were never designed to carry the electricity needed for these types of operations. The systems could be irreparably damaged by having several decades worth of normal electricity consumption go through the home in a matter of a month or two.
  • Can you even get adequate insurance for the house?
  • Can you get your lender to provide a mortgage on the house?
  • What about the potential return of "the criminal element"? There is always the potential to see someone return to "make a deal." Or, they may return to "rub out" what they think is still their competition.
The risks are fully the Buyer's. Are they worth it?

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