GROWING MARIJUANA CHANGES HOUSE VALUE

Growing marijuana inside residences is creating challenges for real estate investors and managers.  Legalization of “medical marijuana” is expected to increase the popularity of the practice and the problems.

A profit centered grow house can create major damage to the structure and interior finish materials that is clear to an observer.  BUT, the use of one of two rooms for a personal operation may be less obvious and easier to obscure from a potential buyer.  Either level of use can  make the house an challenging  purchase.

CAUTION #1: The condition of the neighborhood or exterior of the house is not a dependable guide to a home having been used for a pot growing operation.

CAUTION #2: The physical issues may be of the least importance.  Mold and chemical residues may be present in and behind finish materials.

Guidelines for identifying potential grow operations are discussed in the post at this link:

SEVERAL COMMON ISSUES THAT NEED THE ATTENTION OF A POTENTIAL BUYER:

* Damaged electrical wiring due to overloaded operations.

* Poor quality electrical modifications of circuits or panelboards

* High humidity during grow operations or  exhausts in improper places, like attics, chimneys or crawlspaces; cause  mold, wood rot and mortar damage can result.  Moisture content of 20% in building materials creates mold that can begin damaging building materials.  Excess moisture vented into chimneys can combine with creosote to produce acids that dissolve mortar.

* Holes cut through joists and foundations can cause  floors, roofs, ceilings and walls to shift or fail to support proper loads.

* Industrial Hygienist advise that the biggest problem in remediating a grow house is getting rid of the odor of marijuana.

* Chemical contamination of building materials and property soils

* Painted concrete floors in basement with outlines of where plant pots once were

* Signs of added roof / foundation ventilation

* Concrete masonry patches inside garage (for added ventilation)

* Alteration of fireplaces (to be vented directly from operation area to outdoors)

* Patterns of screw holes in basement walls and floors (where temporary partitions once were)

* Abundance of rust in and around furnace (from extreme humidity levels)

* Remnants of topsoil in corners of basement floor

* Added, redirected or blocked vents in the duct system

* Visible signs of mold growth

* Water stained walls / floors / windows from dripping condensation

* Skunk-like odor in basement or throughout home

* Added water piping in basement

* Excess electrical wires hanging from basement ceiling with seemingly no purpose

* Signs of previous extensive alarm or security camera systems

If there are suspicious signs noted during a “walk-through” , the potential buyer should insist on a complete history report  of the residence and a thorough inspection by a professional who has training or experience with identifying  grow house risks. The brokers may not have sufficient knowledge of the issues to provide dependable advice.

Experts advise that remediation of a residence with one room that was used as a “farm” is not extremely difficult; BUT, use for larger scale “farms” may create expensive requirements.  At last report, there are no financial resources available to recover these remediation costs, other than traditional real estate investment tax provisions.