Grow-op registry only alienates lenders

Grow-op registry only alienates lenders

Grow-op registry only alienates lenders

 

A bill to establish a marijuana grow operation and clandestine drug laboratory registry in Ontario will only stigmatize properties and punish consumers, says one mortgage agent.
 
“I don’t see the value of a registry in general,” says Aneta Zimnicki, a Toronto-area mortgage agent. “It is of zero value.”
 
Zimnicki – who is also a landlord – argues that properties that have been properly remediated should have a clean bill of health, and not carry the stigma of having been a grow op or drug lab the rest of their lives.
 
“It is no different than a house that has bad wiring. If it is fixed, then it is OK,” she told MortgageBrokerNews.ca. “The consumer shouldn’t be punished 20 years down the road for a house that has been properly remediated,” pointing out the difficulties mortgage brokers and agents have in securing a lender for clients with a home that has been identified as ‘remediated’.
 
If passed, the bill will require municipalities to register remediation work orders on title of former marijuana grow operation/clandestine lab properties.
 
The Clandestine Drug Operation Prevention Act has already been endorsed by the Ontario Real Estate Association, which has been asking for just such a registry for over a decade. OREA had commissioned an Ipsos Reid study in October of last year which revealed 93 per cent of Ontario residents wanted to know if the home they were planning to purchase had been used as a drug lab or grow op.
 
But Zimnicki sees consumers paying the price when it comes to finding a lender willing to finance a home that has been labelled a grow op or drug lab.
 
“Sometimes lenders don’t think it through. There are some great lenders out there – the B lenders – they understand that a full remediation works,” she says. “But a registry? It is just another thing lenders will freak about about.”
 
Realtors are obligated by law to reveal if a home has been used as a drug lab or grow op, but are hindered by the lack of a central registry.
 
Grow ops and drug labs cause significant damage to homes, creating mould, chemical contamination, structural alterations and hazardous electrical rewiring. Often these homes only receive cosmetic renovations to disguise their former use. Homebuyers who unknowingly purchase such a home find themselves facing a loss of home insurance for the property and high remediation costs.news/green%20house.jpg" style="width: 314px; height: 235px;" />
17 Comments
  • Paolo Di Petta | dipettamortgage.com 2013-03-12 3:47:52 AM
    It makes sense to track homes that were former grow ops, but at the same time, once they're fully remediated and receive a passing certificate, it's only logical that they should be removed, isn't it?
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  • Derek Rowley 2013-03-12 4:23:06 AM
    Do the registry. We need one to prevent the sale of thgese former properties that are being listed and sold without disclosure that the property was a former grow op. Have seen this way too many times. Do the registry and do it now.
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  • David O'Gorman dkog@mortgageland.com 2013-03-12 5:25:51 AM
    But what does "fully remediated" mean? If the sheathing, joists & rafters in the attic are black with mold, and there is mold between the drywall & the exterior walls & there is unknown chemicals spilled on the concrete floor in the basement, then remediation is a bulldozer. I have been a few grow-ops after they were busted & if a property has been a grow op over only one winter, there is no way I would let my family live in the property, "fully remediated" or not.
    In Toronto & the three surronding regions ( York,Durham & Peel) the police services in those areas claim there are a total of 5,000 to 10,000 grow-ops. Only a small fraction of those are busted by police. So a registry may give only a false sense of security. The open eyes of a listing real estate rep & an inspection by a qualified/experienced home inspector are still a consumers best choice.
    It has only been a few years since the FI's started to disclose POS grow-ops to
    buyers. In the past they paid their clean-up crews to hide the fact that the properties were former growops & hid behind the "as is, where is" clause in the agreement of P&S. Will those houses show in the registry?
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