REALTORS FACE POT DILEMMA

The wildfire spread of indoor marijuana grow operations is not only posing
major headaches for police and neighbourhoods, but a dilemma for realtors.

Even if realtors strongly suspect a home they're selling has been used as a
pot growing operation, in many cases they can't disclose that to
prospective buyers for fear of a lawsuit.

There are approximately 50,000 grow operations in Canada. Half are in
southern B.C., and according to RCMP estimates, Surrey alone has close to
4,500.

Many of these homes eventually change hands through legitimate real estate
sales.

Canadian Real Estate Association (CREA) spokesperson Bob Linney says a
disclosure can only be made when the grow-op is "known and confirmed."

Making a disclosure in a case where a homeowner was charged but not
convicted, for example, could result in the realtor being sued for false
representation.

"The realtor is the one caught dead square in the middle," said Linney.

Disclosure conflicts with federal privacy legislation, which comes into
effect in January, 2004.

It states a realtor cannot disclose the address of a home without approval
from the owner.

"The police can seize plants from the home," said Linney. "But we can't
disclose the address of the house without the approval of the owner."

Nevertheless, Linney said CREA is recommending realtors disclose in
confirmed cases.

"We would like every disclosure to happen, and that includes leaky
basements, leaky condos and grow-ops," said Linney. "The issue is having
absolute proof. There are no guidelines."

Linney added while there are standard disclosure rules which vary from
province to province, there is currently no legal way to compel realtors to
disclose, although there is a code of ethics realtors must follow.

If damage to a home is not obvious from a visual inspection or has been
purposely hidden from the potential buyer, the seller and agent can be held
responsible.

However, when damage to the home is obvious or visible, the onus is on the
purchaser to make reasonable inquiries.

Proving someone was aware of an unseen defect is a difficult task, and no
laws are currently in place to deal specifically with grow operations and
disclosure.

That may soon change.

Fraser Valley Real Estate Board president Reg Davies indicated the Real
Estate Act is currently being revamped and the addition of laws regarding
disclosure of grow-ops are being considered.

Realtors who do not disclose information about whether a home has been a
marijuana grow-op may be subject to charges under the Criminal Code if the
act is amended.

Davies said while he's heard many "horror stories" regarding the sale of
such homes, he believes the problem is limited to a few shady realtors.

"Obviously, there's money to be made," he admitted. "But most them are very
professional. It's a handful, (of realtors involved) if that." Private
sales are another avenue of concern.

Up to 12 per cent of all home sales in B.C. are done privately, without the
services of a realtor.

Because the market in the Lower Mainland is so active, independent sales,
or the use of notaries and lawyers, have become increasingly prevalent,
said Davies.

In these cases, the sale is often completed without the intermediary ever
seeing the property in question.

Lawyers merely represent either the seller or the buyer, and are not
involved in advising, recommending or marketing homes. When a lawyer is
involved, solicitor-client privilege means information can be withheld from
the purchaser.

"You can't disclose information to the purchaser without the vendor's
consent," said Franco Trasolini, chair of the Canadian Bar Association's
Vancouver real properties section.

In the case of a lawyer having knowledge of a grow-op, for example, it
would be up to the lawyer to be ethically responsible and remove himself
from the retainer.

Trasolini admits this is a "grey area of ethical duty," but added most
lawyers would not be privy to that information in the first place. "Lawyers
are simply not involved in the inspecting and marketing of homes," said
Trasolini.