GROW HOUSES PUT REALTORS ON EDGE

Real Estate Board Cooking Up New Rules On Disclosure

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

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

There are said to be 50,000 grow ops in Canada--half of them in southern
B.C. RCMP estimate Surrey alone has close to 4,500. Many of the homes
change hands through legitimate real estate sales.

Canadian Real Estate Association's Bob Linney said 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.

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

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 the owner's approval.

"Police can seize plants from a home," Linney said, "but we can't disclose
the address of the house without the approval of the owner."

Still, Linney said CREA recommends realtors disclose in confirmed cases.

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

Linney added while disclosure rules vary from province to province, there
is no legal way to compel realtors to disclose, beyond a code of ethics.

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

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

Proving someone was aware of an unseen defect is difficult, and no laws are
in place to deal with disclosing grow ops. That may change.

Fraser Valley Real Estate Board president Reg Davies said the Real Estate
Act is being revamped, and may soon include laws regarding disclosure of
grow-ops.

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 concern.

Up to 12 per cent of all home sales in B.C. are done 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,
Davies said.

In these cases, the sale is often completed without the intermediary ever
seeing the property. 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," Franco Trasolini, chair of the Canadian Bar Association's
Vancouver real properties section, said.

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,"
Trasolini said.