Brokerage

If you haven’t sold a marijuana grow house yet, you probably will

As states relax pot laws, real estate agents face new disclosure and liability headaches

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Relaxed pot laws in many states mean more homes are being used as “grow houses,” raising potential liability and disclosure issues for listing brokers and agents.

More than half of the U.S. Realtors live in jurisdictions that permit the medical or recreational use of marijuana, the National Association of Realtors said in summarizing a panel discussion on the topic at the 2014 Realtors Conference and Expo in New Orleans.

According to the Institute of Real Estate Management, 23 states and the District of Columbia allow medical marijuana use, and 15 states allow residents to grow marijuana for themselves or other medical marijuana users. Two states have legalized recreational pot use.

The number of agents who find themselves helping clients buy or sell former grow houses is expected to grow, as shifting public opinion leads more states to follow suit.

One question raised by legalization: Are real estate agents obligated to disclose if a seller has grown marijuana in a home?

That might be important information, since growing a lot of thirsty plants indoors can damage a home. The high humidity levels needed for growing marijuana can cause mold, for instance.

So far no state requires that sellers disclose to potential buyers that a house was used to grow marijuana. But that doesn’t mean a seller and their agent might not get hit with a lawsuit if a buyer discovers problems with a home that were not disclosed.

Pauline Aunger, a Realtor in Ottawa, Canada, where medical marijuana is permitted but illegal growing operations have become a problem, said listing agents should disclose if a property has been used for growing marijuana.

“Realtors need to ask questions of sellers if they suspect the home was ever used for the growth of marijuana,” Aunger said on the NAR panel.

The Association of Saskatchewan Realtors has called for the government to create a “grow-op” registry to alert prospective buyers if homes have been used to produce methamphetamine or grow marijuana.

In a “Field Guide to Marijuana Grow Houses,” NAR noted that in 2011, more than 800 illegal grow houses were seized in Florida alone.

Denver real estate broker Jack O’Connor tells the The Palm Beach Post that marijuana legalization has created “a disclosure nightmare.”

Of course, one broker’s nightmare is another’s opportunity.

In January, Denver agent Bob Costello launched a marijuana-friendly marketing campaign offering prospective clients who might want to grow pot insight into what type of homes they should be looking for.