3/14/18

Recently a friend of mine posted a question on Facebook that caught my eye: I have altered it a little but the spirit remains the same:

Had a real good laugh today. A friend was so excited that he got his license to grow medicinal marijuana at home that he made a grow room. I asked him if he thought what would happen if he ever had to sell the house. Now that you have a legal grow op you still have to declare it. He essentially called me stupid, suggesting that I don't know what I'm talking about. What do you think does he have to declare it and not be able to sell the property as of it is a grow op or am I just stupid?

 

I responded:

Interesting development!  I have not researched this legally, so this is just an off the cuff opinion - that being said: There should be several well known facts pointed out. The 'spirit' of full disclosure in the event of a home being used as a grow OP is because when a home is converted into such an establishment, power is haphazardly rerouted, ventilation is often done from room to room and the humidity in the growing area is kept tropically high. These things cause material damage to a home, and even when the operation has ceased things like mold in the walls and timbers and overtaxed circuits as well as wetting drywall and drying it over and over again causes it to sag and expand/contract weakening the hold of screws/nails/tape lines etc.. I am sure now that your friend has a permit and has constructed a room to carry on with his operation, he has made the room on separate dedicated GFI circuits, well ventilated to the outside with odour filtration, water-proofed the room built with cement board to protect the house, an emergency fire suppression system and has informed his insurance company of this 'addition' to his home.(I just made up those requirements - not sure what they are if any)  Now assuming he has done his due diligence, constructed this room according to established by-laws governing such an operation and the room is clearly dedicated, then yes, of course it has to be disclosed - but disclosure of such an appropriately and professionally constructed operations room in a home will in many ways be looked at as an upgrade, not unlike a hot tub or swimming pool - maybe not for everyone, or even not for most people - but for some will be a bonus and it only takes 1 person to love the features of a home to sell it. Make sure that any rules are checked within each Municipality as well, every situation may have different regulations as well. Mccarthomes.com

 

Since that response, I have been researching the details - as I suggested each local municipality will have its own regulations and in any individual circumstance you will need to investigate your local by-laws and restrictions.  I looked in my local area, the Township of Georgina and I was ultimately referred to the local building by-laws. They have no specific rules regarding a medicinal marijuana grow room, just need a permit and to disclose the use, submitting to federal regulations on the material restrictions and operation of the permit. Where the issue starts to become a problem is with that snowball, you need to disclose use to the municipality to get a permit, once you have disclosed the use then you need to notify your insurance company of this change in the specific use of your property.  It seems that mainstream insurers do not have a facility to insure under with this new federal license, so you are going to be pushed to an alternative insurer, which of course costs more. In addition the secondary insurer will require very strict inspections EPA, local by-law compliance, etc. and they are going to have extensive exclusion waivers that will exempt the insurer from responsibility due to water, mold, and other ‘grow operation’ related damages. Once you have your permits obtained and ultimately satisfied and inspected, your EPA completed, and your inflated insurance in place - your next hurdle will be when your mortgage comes for renewal. I am still researching that aspect and will update as further information becomes available. Personal and professional relationships are the foundation of successful business and sometimes the only sentry guarding your sanity, we are here to help! mccarthomes.com

 

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Merilyn McCart

Merilyn McCart

Sales Representative
CENTURY 21 Heritage Group Ltd., Brokerage*
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