With marijuana about to be legalized, I’m concerned about buying a former grow-op. Does the seller need to disclose this information?
In most cases, probably not, but the disclosure of such information is a decision that a seller needs to make after consulting with their real estate salesperson and a lawyer who is insured to practice real estate law. To be clear, I assume you mean a property where many plants were grown illegally because the new laws will permit the home cultivation of just a few plants.
Under the current laws in Ontario, a property seller is not required to disclose the personal history of their home, even if it carries a psychological stigma: a non-physical attribute that could trigger a negative emotional response from potential buyers. Perhaps a charming lakeside cottage was once the site of a gruesome murder, or an unassuming bungalow in the suburbs was the childhood residence of a serial killer. A home that once housed a marijuana grow-op that has since been cleaned up and declared safe for habitation could be considered stigmatized.
The courts have ruled that a seller doesn’t have to disclose an identified stigma to potential buyers (although some may do so out of a sense of moral obligation, or to avoid potential lawsuits), so if you’re concerned about possibly purchasing a home that was once a grow-op it’s important to perform your own due diligence. That means:
- Hiring a qualified home inspector to inspect the property and making your offer conditional upon it passing inspection.
- Conducting your own research – speaking with some of the neighbours and doing some research on the street address.
- Working closely with your real estate salesperson to formulate questions for the seller and their representative.
The seller may direct their salesperson not to disclose a particular stigma, but the Real Estate Council of Ontario’s (RECO) Code of Conduct forbids a seller’s rep from being untruthful if they’re asked a direct question about a property. They are within their rights to decline to answer and suggest you look into it yourself, though. That’s a good reason to only buy or sell properties through registered real estate salespeople or brokers: the industry is committed to upholding the Code and understands there are consequences for breaching it.
As I mentioned in a previous column an exception to Ontario’s real estate information disclosure laws are latent physical defects the owner knows about that could make a property unsafe or uninhabitable – these must be disclosed to potential buyers.
How does that relate to cannabis cultivation? Grow-ops can generate a lot of moisture, which may lead to mould infestations, and they may have undergone potentially unsafe electrical modifications. A seller who believes their home could have a serious defect should discuss disclosure options with their salesperson and their real estate lawyer.
If you have a question for Joe about the home buying or selling process, please email firstname.lastname@example.org.
Joseph Richer is Registrar of the Real Estate Council of Ontario (RECO). He is in charge of the administration and enforcement of all rules that govern real estate professionals in Ontario. You can find more tips at reco.on.ca, follow on Twitter @RECOhelps or on YouTube at http://www.youtube.com/RECOhelps.