Are you wondering how the legalization of marijuana will impact the sale of your home? Under the new federal Cannabis Act, Ontario homeowners are permitted to legally smoke and vape marijuana in their personal residences as well as grow up to four marijuana plants per household. How will the consumption and purchase of this previously illegal plant affect property values? We dive into the most common questions asked by sellers:
Do Sellers Need to Disclose that their home is a grow-op?
While sellers are under no legal obligation to disclose to prospective buyers that their home was used as a grow-op, Ontario real estate agents are required to notify buyers of any material facts that would affect the market value of the home for sale, including if the home was a former grow-op. Additionally, if there are material issues cause by the grow-op (mold, wiring issues, etc.) that make the home inhabitable or dangerous to live in, your realtor must disclose this information to potential buyers.
Will the Stigmatization of Marijuana Devalue My Home?
The stigma of buying a home that previously cultivated marijuana may make selling your property challenging. According to a 2018 study by Zoocasa, more than half of Canadian homeowners would be less likely to consider a property if they knew even the legal amount cannabis had been growing inside. The same survey also found that over half of homeowners felt that growing even the legal amount of cannabis (up to four plants under the Cannabis Act), would harm the value of the property.
Will Growing Marijuana Deter Potential Buyers?
Depending on the size of plants, the humid conditions required to grow marijuana may cause water, electrical, or structural damage to a property. Homes that were formerly grow-ops may also have mold or fungus issues as a result of high moisture conditions, pesticides in carpeting or walls, or faulty wiring. While the legal limit of four plants grown by a responsible homeowner should not result in these extensive damages, even the perceived potential damage of growing marijuana may be enough to discourage potential buyers from considering the property.
How Can I Prepare My Home for Sale?
If your home smells like pot, it can be time-consuming and costly to remove the smell of marijuana out of walls and floors. According to Dan Henderson, president of Del Condominium rental property management, it can cost upwards of $5,000 to remove the smell of cannabis. Before showing your home consider repainting the walls, investing in an air purifier, cleaning or replacing carpets, and of course--don’t forget to remove the 4-foot tall marijuana plant from your living room!
While homeowners that grow marijuana or are located close to dispensaries may see their property devalued in Ontario, it should be noted that property values have actually INCREASED in other areas where recreational pot is legal. For example, in Denver, Colorado, the opening of recreational marijuana stores actually drove up home prices.
Once marijuana plants become more commonplace in Ontario homes, growing cannabis may have less of an effect on the value of a property. However, as sentiments remain largely negative towards growing Cannabis for personal use in Ontario, sellers should be wary of how growing marijuana may harm their home’s resale value.
Are you thinking of selling your home? Call me today at 416 903 7653 or email email@example.com for a Free No Obligation Home Evaluation.