By Stan Sauerwein
Gordon Maroney, President of the B.C. Real Estate Association (BCREA) predicts detailed building inspections will become standard practice by homebuyers in coming years as a result of insurance grow-op exclusions.
Last December, the BCREA added grow-ops and the manufacture of illegal drugs to Property Disclosure Statements for both residential and strata title housing sales. He says that since obvious repairs to grow-ops can be made to disguise their former existence, more responsibility to identify the hidden risk of structural damage is being put on buyers. It is becoming a major concern for realtors. The Insurance Bureau has estimated the average repair bill for former grow-ops between $60,000 and $80,000.
Vancouver's Grow Busters team, including police, fire and property inspection staff, shuts down an average of eight ops in that city every week, most of them in rented dwellings. In the past 18 months, five 'meth labs' have also been busted. Police have estimated up to 20,000 homes in the Lower Mainland alone are being used as marijuana grow operations. Grow-ops, they claim, have an average three month life cycle and so the same home can be used repeatedly by different operators.
Following the example of several other municipalities burdened by the cost of the busts, in late-June Vancouver city council decided to bill property owners for expenses that average $1,700 per bust. They were already placing advisory notes on a property's certificate of title if a home has been used as a grow-op more than once.
While most companies have moved to put grow-op exclusions on rental policies, alterations to the property made by tenants continues to be a litigious gray area. Cover for tenant vandalism is still generally offered with an extra premiums, but some carriers are requiring more proactive effort by landlords.
Co-operators, Wawanesa, and Optimum insist on periodic landlord inspections for example. Gore refuses to cover any losses from any cause if the dwelling was used as a grow-op or for the manufacture of illegal drugs
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