Claudette Charron thought she bought her perfect house — a fixer-upper in need of a little TLC, at a good price in a small community — until she discovered there used to be a marijuana grow-op in the basement and the house needed tens of thousands of dollars of work to make it safe to live in.
"It was a foreclosure, so you know it was at a decent price because I couldn't afford very much," says Charron, who is a carpenter.
"But it was a nice fixer-upper ... with some work and with my skills, I was going to fix it and resell it in two years. It was an investment."
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Charron, her boyfriend and her 16-year-old son moved into their new home in Limoges, Ont., at the end of June 2016, one year after there had been a drug bust at the house.
A day after moving into the community just east of Ottawa, she talked to a neighbour who asked about damage to the basement.
"I said, what do you mean how bad is the basement? She's like 'What? They didn't tell you that there was a big drug bust here and that they took 148 [pot] plants out of the basement,'" Charron says.
"It was disbelief. My heart was in my stomach and I was sick."
Go Public found there is a long list of failed attempts to implement grow-op registries that would publicly identify the locations of drug houses.
Instead, many provinces are left with a mishmash of rules and guidelines around who's responsible for identifying and disclosing former drug houses in real estate transactions.
Experts say the lack of a workable tracking system and clear rules can leave homebuyers facing health risks, diminished home value and huge cleanup costs.
$30,000+ in cleanup costs
The home inspector Charron hired before buying recorded no evidence of a grow-op, even though home inspectors in Ontario are obligated to look for signs.
After learning of the home's history, Charron got another inspection done.
A report from Enviro Pure First Response says there were "telltale signs" of a former grow-op, including marijuana leaf debris under the stairs and evidence of windows in the basement "being taped off with staples still in place and foil tape."
The company also tested for mould and moisture in the air and behind the walls. "The counts in this house were probably in the top five or six per cent of anything that we have encountered for an indoor spore count directly in the vicinity of the grow operation," says Richard Sticklee, who works for Enviro Pure First Response.
He estimated the cost to clean up Charron's home would range from $25,000 to $100,000, depending on what has to be done.
Charron has spent more than $30,000 so far on the house she paid $265,000 for.
Sticklee says the system should work like this:
- Police notify the city of the location of a grow-op.
- The city tags the home.
- The homeowner takes specific remediation steps.
- The city oversees the cleanup to ensure it's done safely and properly.
- The house can be sold, but the seller needs to disclose its history.
Seller denies knowledge of grow-op
In Charron's case, Street Capital Bank of Canada was the seller. It took possession of the house after the people who had the grow-op declared bankruptcy.
Charron is now suing Street Capital, its realtor, and the original home inspector she used.
In its statement of defence, Street Capital "denies having knowledge that the property was used as a grow-op" and denies it "was aware and/or failed to disclose any latent defects."
The mortgage company did not answer Go Public's questions, but in an email from its lawyer, David Ward, it says circumstances like this are rare and "we always work towards resolving issues amicably which we are working on doing in this case as well."
The case is now heading toward mediation and Street Capital says it's "hopeful that all matters can be fairly resolved."
Tracking systems failing
Go Public found tracking systems that should alert potential buyers of a home's drug history are either failing or nonexistent.
Ottawa police do list dismantled illegal grow-ops online, but only five locations have been listed over the past five years.
In Ontario, there is a provincial guideline that says police should notify municipalities, in writing, of grow-ops so the municipality can oversee the remediation and ensure it's done safely and properly. That didn't happen in Charron's case.
On a national scale, the RCMP tried to launch a website in 2010 that was supposed to list addresses of homes across Canada where marijuana grow operations and illegal drug labs were found and dismantled. That too went bust.
Go Public found only Quebec requires sellers to disclose a home's history as a former drug house.
In most provinces, sellers don't have to mention a marijuana grow-op specifically, as long as it didn't do damage. If it did, it is considered a material latent defect, which does have to be disclosed.
Barry Lebow has been a real estate broker and agent and now works as an adviser for brokerages and the public.
"I think that a registry makes sense. I really do. I think that withholding information from the public isn't a good thing and it would make it so much easier," he says.
Lebow notes that realtors in a lot of provinces are responsible for making their "best efforts" to find out the history of a house.
He says marijuana grow-ops are more common than most people realize, saying buyers need to use different search engines to look up the address and owner's names of a property they are interested in buying and searching news archives for reports on grow-ops.
He also suggests talking to neighbours. Go Public canvassed Charron's neighbourhood after she contacted us, asking if anyone, real estate agents or the mortgage company, had come by to ask about the home's history before or after the sale.
"Nobody. The only person that came over was the new owner," says Ethel Manns, the neighbour who told Charron about the drug history of her new home.
"I'd be really upset," she says. "It's somebody's fault. It had to be reported. You can't have a grow-op and not tell anybody."
With files from Rachel Ward
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An earlier version of this story said "no provinces require sellers to disclose a home's history as a former drug house." In fact, Quebec is the only province that does.Oct 02, 2017 2:16 PM ET