Blog by DOINA BIOLAN B.Comm

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FORMER GROW OPS

Trying to get a mortgage approval for a former grow op might be a challenge nowadays. Most lenders have pulled out of this "market", as the risks of having such property on their balance sheet is to big.
First of all, the stigma of a former grow op will always "follow".
Secondly, the law requires that whenever you sell or rent the property in the future, you have to disclosure that it was a grow op.
Third, it does not matter how well it was remediated, unless you did it yourself, you may still find mold in the drywall etc.
The cost of remediation is too high.
Also, you may think that paying 30% less than a normal property, and built some equity in the future...well , not totally true. You will always get less money for the house than the neighbor next door ( remember, at the time of sale you have to disclose it used to be a grow op!!!)
All in all, just the fact that lenders don't give mortgages for these cases as easy anymore and the potential buyer that you may have a few years down the road for your property may not get his/her financing approved because it was a grow op should make you think twice before buying. Lenders also require not only the buyers income , credit and down payment verification , but also lots of documentation regarding the house, upfront, such as: Engineer’s Report, AND Air Quality Report, Inspection report.