Canada is the third country that legalized marihuana. We have heard lots of discussions regarding it with cons and pros of the parties. Now (since October 17, 2018) it is a reality. Every household in Waterloo region got a flyer regarding our rights and responsibilities in growing, consumption and distribution of cannabis. However, this new legislation will affect much more in our lives then just number of bushes we can grow, and amount of marihuana we can carry in our pocket.
How legalization of marihuana affects real estate?
Home-buyers are obviously have to include additional conditions to confirm availability of insurance or financing for a home that was used for grow operations. I would consider a home inspection on such a property as an absolute must.
Home-sellers who was growing cannabis in their homes have to be prepared to discuss any kind of issues with the property that may be relevant to the sale.
What about tenants who grow cannabis in a rental property? It will be risky if the landlord’s insurance does not cover that activity, or if the landlord may not know the tenant is involved in that activity. Home insurance remains uncertainty with the home cultivation of cannabis.
When it comes to obtaining mortgage approval for a former cannabis grow operation, buyers should speak with their financial institution prior to making an offer on a property.
Legal cultivation of cannabis in a home could breach rules of a home owner’s mortgage agreement with the lender. Before a home owner grows cannabis in their property, they should consult with their financial institution to ensure they are not violating rules under their mortgage agreement.
What about landlords? How they can protect their investment properties? At least, they can include provisions restricting the legal cultivation or consumption of cannabis in a lease agreement. It might give the landlord grounds to evict a tenant.
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