GROWING CANNABIS AT HOME? LET’S WEED THROUGH THOSE MORTGAGE ISSUES!
As you may already know, Canada became the second country in the world to legalize marijuana for not only medical purposes, but also recreational purposes in the fall of 2018. Of course, this historic moment in Canadian history has cannabis activists jumping for joy while others are not so (s)toked on the idea.
With legalization comes the realities of growing your own pot at home, which already had Global News giving Canadians a step-by-step guide on how to do so properly and legally.
We have had an influx of clients contacting us for restructuring advice on their current mortgages. However, through our initial discussions, we have found that some have started growing pot plants within their own homes. Since this legislation is new to everyone, including the mortgage community, we decided to do some research.
Prior to September 17th, growing cannabis at home was a legal grey area. Mortgage-wise, it was a red flag. Any home that has previously or is currently being used in the growing of cannabis was treated as a “grow-op” and as a result, was considered NOT financeable.
Since legalization day on October 17, the federal government officially set a limit of four pot plants per household. This information DOES NOT have to be disclosed on a property disclosure UNLESS damage has occurred within the household because of cannabis cultivation (just as an FYI — ALL property owners should consult their realtor or lawyer about how to properly disclose items when selling their household).
After talking to our local Canada Mortgage and Housing Corporation representative (CMHC), she notified us that mortgage insurers are currently leaving lenders to create their own policies on how to deal with marijuana plants and their effect on existing mortgages. We contacted a few of our lenders about this ‘budding’ home-grown industry but were met with no concrete answers as of yet. This situation is certainly a waiting game and we’re all holding our breath waiting for the first move.
Let us share our advice.
If you are looking to sell your property or refinance your mortgage — get rid of those pot plants! Any home appraisal company can disclose in their report that cannabis is present within your home which could place your home on a list that DOES NOT foresee future sales or refinances. It is your safest bet to keep your cannabis plant growth up to the licensed growers located across the country.
If you have any specific cannabis-related questions, we are happy to answer them for you. Just give us a call or drop us an email.