What homeowners and property investors need to know?
With the legalization of Marijuana in just a couple of days there are a lot of questions for homeowners and landlords about its mortgages or legalities. Will some mortgage rules with banks change with its legalization?
What are the lenders positions on mortgages on properties that may have been grow ops?
CMHC will continue to insure mortgage loans for homeowner residential properties where cannabis will be legally grown. CMHC will also monitor the impacts of the Cannabis Act on mortgage loan insurance activities over the long term. What does that mean? It means they reserve the right to say yay or nay depending on the overall situation.
I hear it more than once: I got a really great deal on purchasing a remediated grow-op. What most people don’t know: A lot of lenders have stopped financing remediated grow-ops. There are a few select lenders who will consider them case by case. When I mean a few, I mean the selection is much slimmer and sometimes a more costly option, due to some lenders adding premiums to the mortgage rates for these. It is up to their discretion to do so and the borrower is limited for financing options.
Can a landlord restrict tenants from growing cannabis or smoking cannabis in their properties?
If you are an investor it would be worth your while to consult with a real-estate lawyer what your options are on prohibiting cannabis on your property. You may want to revise your lease agreements for existing tenants as well.
With this change there will be lots of questions and uncertainties. Changes may still happen as lenders are watching the effects. You will want to have a team of licensed professionals (realtors, mortgage brokers, lawyers, insurance agents etc) with their fingers on the pulse and who will be able to advise you with the proper information. This will set you up for success and avoid unnecessary big costs.