Buyer’s Guide – Protecting Yourself From Former Grow Ops

What Exactly Is A Grow Op?
A Grow Op is any building that has been leased or bought by persons in the drug trade and turned into an indoor nursery or hydroponics operation to grow marijuana plants.

How Prevalent Are These Grow Ops?
It’s not exactly known how many of these grow ops are operational in Calgary, however Ald. Diane Colley-Urquhart said: “We do know it’s a serious problem.”

Roger Morrison, a former sergeant supervisor with the Southern Alberta Marijuana Investigative Team, said that during his time with the unit “we always commonly said we have a minimum of 3,000 in Calgary.”

Calgary Police say they raid about 120-140 grow ops each year.

Ron Esch, the executive vice-president of the Calgary Real Estate Board says, “They’re scary in that there are a lot them out there, and if they are not remediated properly, they are a real problem,” he said of residential grow operations. “They’re a real health risk for buyers.”

Mr. Esch estimates there are between 25 and 30 former grow-op homes on Calgary’s multiple listing service at any one time.

Grow ops operate in all parts of the city, in all neighbourhoods, from apartments, to large upscale homes. Most notable was the police raid on May 9th which discovered the largest residential marijuana grow op in Calgary’s history. The assessed value of the Patterson Crescent S.W. home where 2,445 plants were found “was” $1.2 million.

Because of how lucrative marijuana growing is, homes become expendable, just another expense in the operations, leaving a trail of toxic mold-infested homes with severe damage.

The Cost of “Remediation”
If a grow op has been operating for some time, there will be extensive water and moisture damage from the heat. Besides the damage caused by the actual growing of the plants, is the damage purposely caused to set up the operation. Holes can be burrowed through foundation walls where the growers bypass the meter to steal electricity. Exhausts from the furnaces and hot water tanks are disconnected, so the C02 can filter out and help the plants grow.

Depending on the size of the home, the “remediation process” can cost around $150,000, says Ron Esch. The entire home has to be gutted- all the drywall must be removed and the insulation needs to be stripped to prevent the mold from growing back.

According to the Insurance Bureau of Canada (2004), the average claim to repair the damage caused to a grow op was $41,000. As well, many insurance companies have policy clauses that will not cover this type of damage.

Why do I have “remediation process” in quotes? Just because a house has been “remediated” doesn’t mean it’s safe.

Virginia Salares, a senior researcher with Canada Mortgage says homes renovated to clean up mould and indoor air problems caused by defunct grow ops may still be unfit to live in. Insecticides, fungicides, solvents and other chemicals used in the operations are absorbed by drywall, carpeting, wood, subfloors and even concrete basement floors, she says. The chemicals may also be found in backyards, where they are frequently dumped.

Calgary Health Region Website
Calgary Health Region publicly provides a list of Health Inspection Orders, so you will be able to see what residences have been previously ordered “shut down.”

For example, here is the Order for 55 Patterson Cres SW that was recently raided, detailing the problems and what needs to be done:

Here is an excerpt:

  • Mould growth is evident within the premises. Excess heat and humidity produced during the plant growing activities are suitable conditions for mould growth. Mould growth was noticed along several rafters in the basement ceiling as well as in the corner beneath one of the circuit breaker panels.
  • Combustion gases from furnace and hot water tank are being discharged into the premises.
  • Electrical system has been tampered with to bypass the meter.
  • Surfaces throughout the growing and mixing areas are contaminated from the use of chemical/fertilizer solutions.
  • Structural and interior damages are evident in the premises. The entire house is very badly water damaged. Ceilings and walls are condensation-stained, water stained, collapsing and water logged on all levels of the house.

As you can see, the damage is widespread throughout the house and will take significant amounts of money to fix.

If Grow Ops Are That Obvious, Why Should I Be Concerned?
Not all grow ops are shut down by the police, which means only a small portion of former grow ops are listed on the Calgary Health Region website.
It could be that they attempt to aesthetically fix up the place to make it appear as though there are no problem.

Ald. Diane Colley-Urquhart said, “I have been told by residents . . . that they would move into these houses, and then when they go to hang a picture on the wall, the hammer goes right through the drywall because it’s all mouldy and wet.”

Signs to Look For

  • Mould in corners where the walls and ceilings meet.
  • Signs of roof vents
  • Painted concrete floors in the basement, with circular marks of where pots once were
  • Evidence of tampering with the electric meter (damaged or broken seals) or the ground around it.
  • Unusual or modified wiring on the exterior of the house.
  • Brownish stains around the soffit that bleeds down along the siding.
  • Concrete masonry patches, or alterations on the inside of the garage.
  • Alteration of fire places.

It is ALWAYS, ALWAYS, recommended for the Offer to Purchase have a Property Inspection Condition applied. A home inspection is vital for any purchase. At approx $400, it can save you tens of thousands of dollars in repairs, not to mention what health implications there might be if it was a previous grow op.

What To Watch For With Neighbours
A difficult question to answer is whether a former grow op affects the property value of a neighbouring house. What do you think, from a buyer’s or neighbours perspective?

There are things that you watch for:

  • They unload unrecognizable equipment and very few household furnishings.
  • They unload copper and/or PVC pipe, soil, halogen lamps, large amounts of black plastic aluminum ducting, and fans.
  • Come and go at unusual hours but never seem to stay overnight.
  • Little or no garbage is brought to the curb each week.
  • Mail is rarely delivered to the house; mailbox may be taped shut.
  • Windows are always dark and may be secured with metal bars, blacked out or heavily draped.
  • A strong odor similar to skunk cabbage (bulk marijuana) comes from the house
  • Power meter spins at a very high speed (unlikely, as most try to bypass this to avoid being caught by the utility company) or signs of electrical tampering.
  • Heavy condensation on the inside of the windows.
  • Humming sound of fans or generators.
  • Condensation or discoloring on the roof.
  • Unusual amounts of steam coming from vents in the house in cold weather.
  • Rooftop with no snow on it when the surrounding houses are covered in snow.
  • People entering and exiting the residence only through the garage keeping the garage door closed.
  • What are the legal consequences of selling a home without disclosing that it was once used as a grow op?

There is always an obligation to disclose material latent defects that are known or should be known by the seller. The seller (if they knew or ought to have known) could be liable for damages to the buyer for the costs of any necessary repairs to make the property fit for habitation. (Please consult with a real estate lawyer regarding any legal questions, or issues you may have)

But why take that risk? Can you imagine the legal costs, time, and everything else associated with taking the matter to court? An ounce of prevention…

When working with a buyer client, I always check the Calgary Health Region website first, check the title (the Health Order is applied to that as well) as well as STRONGLY RECOMMEND (persuade?) them to have a Property Inspection completed.

Unfortunately, many buyers decide to forego property inspections in order to be competitive in multiple offer situations.

Article Sources:
May 20, 2008 Calgary Herald
August 16, 2007 Calgary Herald
Grow Ops – Canadian Real Estate Association 2004

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10 responses to “Buyer’s Guide – Protecting Yourself From Former Grow Ops

  1. Pingback: News » Blog Archive » Buyer’s Guide - Protecting Yourself From Former Grow Ops

  2. The Calgary Health region has updated their website. The new link to view Health Orders (Former Growops, Unsafe housing, etc) is here:

    http://www.calgaryhealthregion.ca/publichealth/envhealth/healthinspections.htm

  3. Some more evidence that just because a grow-op has been “remediated” doesn’t mean it’s safe.

    Last week, the blaze in Citadel that destroyed 5 homes started in a “remediated” grow-op.

    Although it had been given a clean bill in 2007 by City & Health Officials, the Calgary Police Arson unit said that the humidity and high electricity usage that comes with grow operations puts a toll on wiring and may have played a role in Saturday’s early morning fire.

    Source: Calgary Herald

  4. Pingback: Remediated Grow-ops | Calgary Real Estate Review

  5. Pingback: Landlords: Is Your Rental Property A Grow-Op? | Calgary Real Estate Review

  6. michael clarke

    I am looking at a remediated grow op to purchse. MLS C3522761. I found your article informative. Inspection,Insurance and other info. Who retains the information such as the Engineers repot,electrical inspection, and other relavant paperwork? Does the realtor have these , the owner, AHS or the City of Calgary.

  7. Michael, aside from the obvious implications of it being a “remediated” grow-op, that particular home is also a CMHC foreclosure meaning it’s sold “as is where is with no warranties or representations.”

    Moreover, you would have to sign an amended purchase contract with deleted terms (that are supposed to be there to protect you as a buyer), as well as the following two addendums:

    Addendum A
    Addendum B

  8. If a former grow op has been remediated and renovated, it still garries the stigma, how much should it be discounted for that?

  9. “it still carries the stigma”

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