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Disclosure of Material Latent Defects                                                 ---- Part 2, Grow-Op

1/18/2015

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Under the BC Contaminated Sites Regulation for Environmental Management Act, manufacturing controlled drugs such as marijuana fall into the category of “Schedule 2 Activities", which most likely cause contamination and need many screening measures.  If the operation of grow ops takes place in a residential property, the owner must disclose this fact in term of material latent defect while putting the property on the market.  

Many issues can arise when living in former grow ops house. For example, unexpected property crimes to innocent families, structural damage to the house, and Environmental damage to the soil or water system. In the worst case scenario, the high levels of humidity and altered electrical wiring can possibly lead to the homeowner’s health and life threats.

In additional, purchasing a former grow op house may take a risk of not getting a mortgage from lenders. Over the past few years the majority of lenders in BC no longer finance grow-op houses unless they have been fully remediated. Two documents that lenders will require when financing this type of properties: a Phase 1 Environmental Site Assessment and an occupancy permit.

If the homeowner wants to make sure there wouldn’t be any environmental concerns in the future, having the phase 1 ESA report is not enough, a letter of “Determination” or a “Certificate of Compliance” issued by the Ministry is also needed -- the former states that the site is not contaminated; the latter states that the site has been cleaned up and no longer is considered contaminated.

Whenever encountering a former grow-op property, you should always consult with your lawyer and other professionals.


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