Pubdate: Sat, 24 Nov 2007
Source: Toronto Star (CN ON)
Column: Title Page
Copyright: 2007 The Toronto Star
Contact:  http://www.thestar.com/
Details: http://www.mapinc.org/media/456
Author: Bob Aaron
Bookmark: http://www.mapinc.org/mjcn.htm (Cannabis - Canada)

WE NEED AN OPEN, COMPREHENSIVE GROW-OP LIST

Two weeks ago in this column, I asked whether listing agents should 
be required to disclose that a home was, or might have been, a 
marijuana grow operation, or whether they should disclose only if the 
seller tells them it was a grow-op?

Would the public interest be better served, if the Real Estate 
Council of Ontario (RECO) amended its rules to require disclosure of 
all material facts about a property that the agent is or should be 
aware of that could affect a buyer's decision? I raised the questions 
after I was asked by two clients whether the house they considered 
buying had been a grow-op. The listing agent was silent on the issue 
and declined to answer questions on the subject.

I was swamped with emails from agents, homeowners and fellow lawyers. 
Nearly all came down strongly on the side of mandatory disclosure by 
vendor and agent.

One response was from Sandra Gibney, communications manager of RECO - 
the governing body of Ontario's real estate agents and brokers. She 
noted that agents not only have an obligation to disclose, but must 
"take reasonable steps to determine the material facts" relating to 
the transaction.

The regulations also state that the registrant must disclose to the 
customer all material facts "that are known by, or ought to be known 
by, the broker or salesperson."

Gibney referred to two RECO discipline cases involving the failure to 
disclose the existence of a grow-op.

One involved Mississauga agent Donna Burgess. According to the 
decision of a RECO panel in June, Burgess was representing both the 
buyer and seller in a 2005 transaction, but failed to disclose to the 
buyers that the home they were planning to purchase had been a grow house.

This was a material fact, and she was aware of it because in 2003, 
she had helped the sellers buy the same property. At that time the 
agreement of purchase and sale contained a disclosure that the use of 
the property "may have been for the growth or manufacture of illegal 
substances."

Burgess failed to inform the buyers about the disclosure, claiming 
she had forgotten about it. The buyers and sellers signed a mutual 
release and the deposit was refunded.

A complaint was filed with RECO and a discipline panel ruled that 
Burgess had failed to comply with the Code of Ethics. It ordered her 
to pay a penalty of $15,000.

Given that there are thousands of current and past grow-ops in 
Ontario, and the listings of few, if any of them, disclose the 
history of the property, I would have expected to see more discipline 
cases like the Burgess decision.

Len Chapman, a Royal LePage sales rep in Richmond Hill, emailed to 
say RECO's rules already require disclosure of facts that an agent 
ought to know.

True enough, but it seems they are being widely ignored when it comes 
to grow-ops.

The vast majority of agents and brokers I've dealt with over the 
years are competent, honest and ethical. I wrote about the issue to 
alert readers to the signs of grow-ops, since the history of a 
property - despite RECO rules to the contrary - is not always 
disclosed as it should be.

The courts have ruled that police must disclose the existence of 
grow-ops, but it clearly isn't happening in an open and effective 
way. It's time this province had a comprehensive and fully accessible 
database to eliminate the excuses.

- ---

Bob Aaron is a Toronto real estate lawyer whose Title Page column 
appears Saturdays.
- ---
MAP posted-by: Jay Bergstrom