This topic normally does attract a lot of comedic comments but it’s a serious and growing (no pun intended) problem.
A grow house is basically an illegal indoor hydrophonic marijuana grow operation.
The damages that occur from a grow operation are substantial. According to the Insurance Bureau of Canada the average claim for repair is between $60,000 – $80, 000.
Renovations are normally done to the property to make a grow house. The growers need a constant supply of electricity and the foundation is normally compromised so that the hydro can be hooked up behind the meter. Wiring and lighting are also modified which normally overloads the electrical systems causing hazardous conditions to the house as well as the neighbourhood.
They also require access to large amounts of water. This is normally done by a custom hook-up in the basement. The issue is the excess moisture this causes in the home which in turn generates large volumes of mold and spores and basically rots the house.
There are numerous signs to look for when looking at a home. These could include:
Mold in corners where the walls and ceilings meet
Signs of roof vents
Evidence of tampering with the electric meter or the ground around it
Concrete masonry patches
Patterns of screw holes in the walls
Painted concrete floors in the basement, with circular marks where pots once were
Patterns of screw holes in the walls
Growers need a house in order to set up there operation so we as professionals need to keep our eyes and ears open. If something seems suspicious we need to investigate further. There are various suspicious activities that should raise some red flags. They are:
Third party purchasers
Questionable income sources
No contract negotiation
Offers to pay in large amounts of cash
Secretiveness and no reasonable explanations
Multiple cash transactions
This all boils down to knowing your client and asking questions when something does not add up.
If you suspect an operation then contact the local authorities and let them handle it. Remember this type of operation can ruin a home in months and also possibly effect other resales in the area. Also grow houses are typically in middle to upper class neighbourhoods.
There is a lot of information on line (check out this article Marijuana Grow Houses are Coming to Your Neighbourhood). Do your research and be pro-active as this is a major purchase.
Remember you should check all the people you are dealing with. This goes to the real estate agent, mortgage broker or bank, appraiser and inspector. Make sure you are dealing with reputable people. Ask for references to ensure you are getting the best service out there.
As professionals in the industry it is also up to us to keep up with what is happening in our community. Be educated, look for the tell tale signs, listen to what people are telling us and investigate anything that seems out of the ordinary. You never know you may save your client thousands of dollars down the road. Don’t let your self get mixed up in something that could jeopardize a career you have worked hard to build.
Inspections are too important not to get done. Yes there is a cost and you may lose this money if you do not buy the home. But think about the cost if you bought the home and then find out it had a grow house in it or there where other issues that would have come up with a proper inspection. I feel a $400 investment to save thousands down the road is well worth it. Don’t you?
As always comments are welcome and encouraged.
Eric Gall is a mortgage specialist for TMG Atlantic. If you are purchasing, refinancing or renewing your mortgage contact Eric or check out his website and apply online.
