What happens with real estate transactions involving a home that has had this number of cannabis plants grown within it?
On October 17, 2018, it became legal to purchase small amounts of marijuana and grow up to four plants per residence (not per person) in Ontario. Nonetheless, the prospect of purchasing a home that has been used to grow marijuana may continue to provoke an emotional response from some buyers. As such, it’s important to understand whether this is a concern for real estate clients and to take appropriate steps to protect their interests.
When representing sellers, real estate agents must understand what information must be disclosed versus what information may be disclosed, at the seller’s discretion. As their representative, our role is to understand and explain the issue to assist our clients to make an informed decision.
Read full outline of existing requirements in this recent information bulletin from the Real Estate Council of Canada: Ask the Registrar: Legalization of Cannabis
Highlights
Stigmas - Although certain Buyers may believe a home where a single marijuana plant was legally grown is stigmatized, there is no requirement on sellers to disclose the existence of facts that may elicit stigmas in some Buyers. However, the buyer’s representative can make specific inquiries about issues that are important to their client.
Latent Defects: If growing marijuana has damaged the property to the point that the home is unsafe to live in, and the defect is not obvious to the naked eye, it’s a latent defect that must be disclosed.
No Property Damage: The issue is less clear-cut if the property was previously used to grow marijuana but is not damaged in any way. Under no circumstances may a Seller's Agent disclose a stigma without the Seller’s consent.
Working with Buyer: if the buyer has made it clear that they do not want to purchase a home where marijuana has been grown, Buyer's representatives have an obligation to request disclosure from Sellers, do independent inquiry and may include in offer a seller’s warranty that the home was not used to grow marijuana.
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