Will legalization of cannabis home growing change the way REALTORS® have to do business?
In a nutshell, the answer is no—at least for now.
Realtor responsibility
Realtors must take reasonable measures to discover a property’s history of growing cannabis, and ensure disclosure of that history, specifically because of the risk of a material latent defect. Those responsibilities will not change with the legalization of cannabis.
Disclosure required
Because indoor cannabis growing can create or lead to defects in a building, it must be disclosed, regardless whether the cannabis is for medical or recreational purposes. This is consistent with the FVREB’s policy and is true even if cannabis growing has not caused any damage or health risk to residents of a property.
As stated in Council’s Professional Standards Manual, “While marijuana for medical purposes may be grown legally with the necessary licence, the possibility remains that its growth could result in a property defect.”
Realtors must ask property owners to sign a Property Disclosure Statement (PDS) declaring knowledge of any cannabis history on the property. And the Realtor must do so even if the property has been professionally cleaned and repaired to the standards required by municipality bylaws, health authorities and fire departments.
Unfortunately, there is no standard remediation procedure or inspection process provincewide. This means that every Realtor must refer to the approved remediation process for each municipality on a city by city basis if they want to ensure remediation has been properly carried out on a particular property.
Council
As far as we know, the basic principles that have informed the Real Estate Council’s guidelines on the matter of cannabis will not change with legalization.
Council will likely update the language regarding cannabis (marijuana) used in the text of the Professional Standards Manual once recreational cannabis becomes legal on October 17th.
Property Disclosure Statements
Because PDSs are industry forms, Council will not have any direction on how the forms may be revised. However, BCREA and member boards are working on revising their forms to ensure the language and terms of reference are consistent with new legislation on cannabis.
Mortgage lenders and insurance companies
Mortgage lenders, insurance companies and home warranty programs will continue to be interested, and concerned, about the presence of residual damage or health risks from former grow homes. They will have discretion about what limits or measures they adopt to reduce their financial liabilities connected to cannabis grow homes.
Landlords and Tenants
When a Realtor is acting as an agent for a landlord or tenant, she or he must also disclose all known material latent defects to prospective tenants—including cannabis growing—unless the Realtor’s clients have already made a full written disclosure to them. If the landlord-client instructs the Realtor not to disclose a material latent defect, the Realtor must refuse to comply. Instead they must insist on disclosure or walk away.
Unless there is a change in legislation federally or provincially, the BC Residential Tenancy Act and Strata Property Act will determine how landlords, tenants, and strata councils deal with indoor cannabis growing, in terms of what is permitted and the process for disclosure at these properties.
Legal Update Course
The Legal Update 2019 course will be revised to reflect Bill C-45 the Cannabis Act, making recreational cannabis legal for use and production. The details of those revisions are not yet known but we anticipate they will likely be technical revisions for accuracy.