An increasingly important issue to the real estate industry and Canadians in general, has become the proliferation of grow-houses in this country; homes that have been converted into marijuana operations, of which there are an estimated 50,000. (Source: CarsonDunlop Consulting Engineers, www.carsondunlop.com)

Amongst a bevy of concerns that grow-houses bring with them; like health risks and fire hazards; police have found that they also have links to the criminal element and organized crime. (Source: Delta, B.C. Police Force)

Grow-houses also have the added side-effect of reducing the value of surrounding properties, mainly because of the extensive damage that is caused during its set-up and operation.

It becomes quite clear with the concerns and risks outlined above, that there is a responsibility and a role for leaders in the real estate industry to not only work ethically as buyers and sellers of property, but also to work with police, hydro companies and government officials to tackle the problem at its root.

The real estate industry is in a very unique position; as front line workers, Realtors(R) have the most and easiest access to residences. That places the industry in a powerful position of showing leadership and setting ethical standards when it comes to protecting the community at large.

So just what is a Realtor's(R) liability and responsibility in the face of this relatively new and certainly troubling issue?

Janet E. Russell of Scott Hall LLP, Barristers and Solicitors, recently published the following helpful opinion in CREIX, the newsletter of the Alberta Real Estate Insurance Exchange:

"Recently a number of 'grow-houses' have been identified throughout Alberta. These properties may have suffered damages from the high heat and humidity of the greenhouse conditions. CMHC has indicated that it may not insure a mortgage on a property known to have been a grow house. Other lenders may not extend mortgages.

What is an agent to do? Grow operations can produce conditions that may make a house inhabitable due to structural damage or toxic moulds.

If the agent knows that the house has been grow-house, they have an obligation to disclose this information to potential buyers. What if you are only suspicious? Your suspicions may give rise to a need to conduct some investigations.

If the seller advises you that the property has had or may have had a grow operation it and is not prepared to disclose that to potential buyers, BEWARE. Do you want to list this property? There is a great risk both to you and the seller in this situation."

The real estate industry in every part of this country is attempting to work with their communities to tackle this issue. Even the most recent issue of the Ontario Real Estate Association newsletter, Realtor Edge, is tackling the issue and advises to disclose when it comes to grow houses.

Property managers, including real estate brokers, may be held liable for renting out houses that are converted to illegal operations and sellers of former grow houses must rely on their real estate professionals to properly disclose the past use rather than incurring liability by attempting to hide this criminal history. (Source: Realty Times; PJ Wade)

The bottom line is that every Realtor(R) is obliged to disclose any defects that affect the property. And although seller disclosure forms are not mandatory in Alberta, knowingly entering false information on the forms leaves the seller open to legal liability.

Realtors(R), in increasing numbers, are taking leadership roles in setting the example and developing ethical standards when it comes to reporting and disclosing grow-houses. By doing so, they do themselves, their clients and the community at large a great service.

HELPFUL HINTS:

The following are some helpful tips in identifying a grow-house:

- Few people are seen coming and going from the home.

- There are late night or very short visits by people.

- There are strange smells coming from the home, often at the same time of day or night. It can smell strongly of fabric softener, or have a "skunk" smell.

- People are continually coming and going with large bulky items or garbage bags.

- There is evidence of tampering to the electric meter (damaged or broken seals) or the ground around it.

- There are water and/or electrical cords running to the basement or outbuildings.

- The home makes a humming sound or has motorized, fan-like noises.

- The property has excessive security (guard dogs, "keep out" signs, high fences, heavy chains and locks on gates).

- The windows of the home are always covered, and have condensation on them.

- The neighbours are never seen taking groceries or furniture into the home. They put out little or no garbage.

- Outbuildings have air conditioners.

(Author's Note: It is important to note that under current guidelines, there is no obligation to let buyers know whether or not a house has been used as a grow operation, as long as there is no known or visible latent defect, including mould or any electrical bypasses.)

-Stacey E. Gray is Communications Supervisor at the Calgary Real Estate Board.