For years we have talked about marijuana grow-ops. No more. As of this week the rules and vocabulary change.
As of this week cannabis is legal across Canada. Regardless of personal opinion on use, the change has opened a whole bunch of questions regarding cannabis and real estate. This will change over time so this article is valid as of today and I will do my best to update it.
Homeowners: Check your insurance policy if you are considering growing cannabis in your home. This is new stuff. There may be related clauses in your contract that may invalidate coverage.
Condo Owners: The condo board rules apply regarding smoking on the property so check out the board rules.
Sellers: You will now most likely be asked if you grow or consume cannabis in your home if you are selling your home. As grow-op is no longer defined, the questions will change. As with all things you can refuse to answer but you cannot lie. Especially if there are photos of said plants in your listing.
Buyers: The grow op forms we have used seem to be now moot since folks can legally grow cannabis in their homes. If you don’t care at all then no worries. If you care then we have more to talk about. There will be home growers (smaller numbers allowed), medical growers (larger numbers allowed), and old school house takeovers (what we used to call grow ops). Learn more about buying a home in Calgary.
Tenants: Landlords can limit use. Check your lease and speak to your landlord.
Landlords: Ensure your contracts are written to reflect your intentions and that your insurance and tenant’s insurance is valid for your situation.
At the end of the day the market will begin to tell us the financial impact of these changes. In the meantime, it is question asking time. A seller is only required to disclose a material latent defect.
From RECA (Real Estate Council of Alberta)
A material latent defect is a physical defect that is not visible and makes a property:
– dangerous or potentially dangerous
– unfit to live in
– unfit for a buyer’s purpose
These are defects that may not be discoverable during a visual inspection of the property, even by a professional home inspector.
Material latent defects may also include:
– defects that would be very expensive to repair
– when a seller has received a notice from a local government or authority that something about the property must be fixed
– when the seller does not have appropriate building or other permits for the property
These are things your professional will not know unless you tell them. If defects are discovered by a buyer during an inspection, or by their own real estate professional or lawyer when they review permits, real property reports, or title, it could put the transaction in jeopardy.
Cannabis growing of a small number of plants is argued by many as no different than other plants.
So that’s not a material latent defect. But for some it has a stigma. Again, back to asking questions.
As of this week it all changes. Ask questions.
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