How Cannabis Legalization Affects Real Estate

Cannabis became legal in Ontario on October 17th, 2018. Legalization of cannabis has come with its own set of new rules, regulations and changes in many different places. Where can you smoke? Where can’t you smoke? Where can you buy it? How old do you have to be?

How does it affect my Real Estate? As the legalization is very fresh and new, we can only provide some basic information and guidelines. As time goes on, these guidelines may change and evolve. Here’s what we know so far:

Growing Cannabis:

Federal legislation allows up to four plants per home. The plants can be grown indoors or outdoors. Four plants per home, not per occupant.

The growing of cannabis inside the home is an important focus and issue for real estate resale. Even on a small scale, growing cannabis inside the home can pose health and safety issues such as mould, fungus, unsafe wiring, and chemicals. These risks are often hidden when the property is sold, making it difficult for REALTORS® and Buyers to detect.

A Buyer could add conditions and/or clauses to an Agreement of Purchase and Sale to address specific concerns. For example, a Buyer could add a condition to confirm the availability of insurance or financing for a property where cannabis was previously grown. Also, a condition on review by a home inspector and other contractors could be added to ensure that the property has not sustained damage due to moisture or other implications of having cannabis in the home. Speak to your Saugeen Team REALTOR® about other conditions and clauses that can help protect you.

Another issue that can affect homeowners is that legal cultivation of cannabis in a home could breach the rules of your homeowner’s mortgage agreement with your financial institution. As a homeowner you should consult with your lender to ensure that you are not violating their mortgage agreement rules.

Condominium occupants are allowed to use recreational cannabis in their units or on common element space, where smoking is otherwise permitted, and grow four plants per residence/unit. However, condominiums have the authority to regulate the use/production of cannabis under the Condominium Act. A condominium board could include a ban on the use and cultivation of cannabis inside of the units. Medical cannabis is not affected by this legislation. A condo corporation must allow the use of medical cannabis.

Landlords may include provisions restricting the legal cultivation or consumption of cannabis in a lease agreement, which may provide the landlord grounds to evict a tenant.

Your Saugeen Team REALTOR® will continue to monitor the laws, rules and trends to help you make the right decisions whether you are thinking of selling your home with cannabis plants or buying a home that’s had plants growing in it. Call The Saugeen Team Today!

Written by Samantha Trumbley, Sales Representative

*Information in this article provided in part by OREA: Cannabis Legalization: What Ontario REALTORS® Need To Know – October 17th, 2018.