Broker calls for grow-op reform

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Certain homebuyers are being unjustly punished by lenders for purchasing houses that should not be classified as grow ops, according to one industry player.

John Greenlee, a broker with The Mortgage Centre, has had trouble finding financing for houses that had been used as grow ops for marijuana, but he also tells of an instance when a house was improperly categorized one.

“(A Realtor I deal with) was trying to sell a "former Grow-op" where the previous tenant (from 12 years ago) was found to have had two or three plants growing in the bathroom. No modifications were made to the building like a traditional grow-op,” Greenlee wrote on “For all intents and purposes, other than the plant being illegal, it wasn't anything different than someone growing a lemon tree in their living room.”

Greenlee told the house was mentioned in a police report, which was enough for it to be considered a grow-op by lenders.

The clients had trouble selling the house as a result. And he thinks there should be more clarification around what is considered a grow-op.

For his part, he has had trouble finding financing for houses classified as grow ops.

“I don’t recall higher rates but lenders have certainly gotten tougher on the underwriting,” he told “We always disclose it to a lender; some lenders, including Scotia, won’t even do them anymore."

Currently, grow-op houses are red flagged in CMHC’s database, and they require a number of requirements before it will insure the property for lenders.

Eugene Pilato, of Century 21, wrote about the requirements for insuring former grow-ops in a blog post, including a copy of an environmental audit, a certificate ensuring the property is habitable, a minimum down payment of 20 per cent, and an insurance premium of one per cent of the amount of the mortgage. 
  • Jake Abramowicz on 2015-06-22 11:21:26 AM

    Can someone tell me which lenders DO finance former grow-ops? The last one I thought was firstline, but haven't heard of any lately.

  • Janice Ashworth on 2015-06-22 6:14:53 PM

    I recently had a client that bought a hoarder's house and is going through the remediation process. These are the same remediation requirements that a former grow op house must go through.
    He will not be required to declare that it once was a hoarder's house - even though the mouse infestation, rotting garbage, water damage and other major issues that existed prior to the remediation were as bad as any grow op house for safety and health.
    Had he bought a former grow op and did all the required work - he would still have to report that it was a former grow op. So would the next owner and the one after. Basically - until the house is demolished it will be required to declare that it was a former grow op - regardless of the remediation.
    This unfair stigma has resulted in almost no lenders doing mortgages on these properties. These properties that are now in better condition than many of the "regular" houses that sell everyday.
    Why remediated grow op homes have to declare the past history for the life of the home and other remediated properties don't makes no sense. Remediated means - it was remediated - doesn't it????
    I do not understand.

  • Semira Causevic on 2015-06-23 4:06:51 AM

    I have heard that CIBC will finance former grow ops if re mediated.
    In any case, I would warn anyone buying a former grow op. There is a home in my neighborhood that was a former grow op. The basement was full of plants. The home was re mediated and passed inspection. The house was sold for a really good price and guess what, the mold is back and this is 10 years later. The new owner is not able to sell the house because it is a reported former grow op. He is not be able to live in it , he may have to abandon the house as he is not in a financial position to tear down the house and re build. Over the years the windows were always sweating (moist) and you could see it on the siding as well. The new owner changed all new windows thinking it's the windows. The mold was building up in the walls and is now in the attic.
    I also use to say, but the house was re mediated and passed health inspection what is the problem. Now, I am skeptical having first hand experience with my former neighbor. It is true, mold can come back 10 or 15 years later.

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