Several B.C. real estate agents are under investigation for helping to set up pot grow-ops, says the head of the RCMP's Co-ordinated Marijuana Enforcement Team.

"We know of certain (agents) who seem to have acquired a specialty in the field," says Insp. Paul Nadeau. He stresses investigations apply to agents who knowingly help growers acquire properties, and not those who unwittingly assist criminals.

Marijuana grow-ops are illegal facilities that cultivate pot for commercial purposes. According to researchers and police, B.C. has the most grow-ops in Canada, but investigators are only able to uncover an average of 1,500 of the 4,500 reported annually, while many others go undetected.

Homes used as grow-ops are susceptible to mould, rot, electrical damage, water damage, skunky odours and fires. The Insurance Bureau of Canada estimates the average damage-repair bill from a former grow-op at $60,000-$80,000.

Bayne Stanley, Business Edge
RCMP Insp. Paul Nadeau (above) says he knows real estate agents who specialize in marijuana grow-ops. The intensity of such facilities can hurt resale value by mould, rot, electrical damage and water damage, among other things.

So far, says Nadeau, no agents have been charged with helping to set up grow-ops, but he has "no doubt" they will be sometime in the future as the Marijuana Enforcement Team, established last fall, completes more investigations.

"We've got different investigations where we've encountered real estate agents, mortgage brokers and the list goes on," says Nadeau, refusing to put a timeframe on when charges will be recommended by investigators to the Crown.

"You've got builders involved in this stuff, you've got electricians. There's a lot of money out there to be made and there's an attitude or a feeling with some people that it's quasi-decriminalized or legal - and that's part of the problem."

Noting that the courts tend to be lenient on convicted offenders, Nadeau says investigators are merely content to stop grow-ops. Rather than recommending criminal charges to Crown prosecutors, he says, investigators may try to ensure that agents, mortgage brokers and others who require licences to operate are disciplined by their professional organizations.



"Quite frankly, I'm not going to send all my resources to go work on a real estate agent," says Nadeau. "I'm going to work on the people that are actually controlling the organization and on up."

Gordon Maroney, president of the B.C. Real Estate Association (BCREA), an umbrella group of local boards, says he's not aware of any investigations of agents or impending charges.

"(Nadeau) obviously has more information," says Maroney.

He says the Fraser Valley and Greater Vancouver real estate boards have complied with RCMP requests for the names of agents involved in certain sales, but he does not know whether the properties were alleged grow-ops.

The province's Real Estate Council of B.C. licenses agents, while the Real Estate Board of Greater Vancouver (REBGV) and other local boards set ethical guidelines and can suspend members, who would then not be able to sell properties via the Multiple Listing Service.

The new provincial Real Estate Services Act, which took effect in January, requires owners who are selling properties to disclose whether the homes ever housed grow-ops. If a seller refuses to sign a disclosure form, the agent must bow out of the deal.

Nadeau praises the BCREA for being aggressive and supportive of RCMP when it comes to dealing with grow-ops. "If people want to lie about these things, they will," says Nadeau. But (the new disclosure rule) sent a message that (agents) are serious about this."

The BCREA has also provided funding for an RCMP school drug-awareness program, says Maroney. He and REBGV immediate past-president Andrew Peck say disclosures of sales of former grow-ops are on the rise.

"We've had more than we had five years ago - there's no question about that," says Maroney.

He adds he's hearing about more sales involving properties that were used as bases to grow marijuana.

The BCREA is encouraging its members to become more educated about grow-ops and offers online courses on the subject, while the Canadian Real Estate Association has also published a booklet on how to identify grow-ops.

"The real estate community, in general, has just become very upfront about (former grow-ops) because it's something that gets asked and agents are not willing to put their licence at risk for, essentially, a seller's lack of disclosure," says Peck.

He says the new Real Estate Services Act clarifies disclosure rules for agents who act for sellers. Under the old rules, an agent could not force the seller to sign the disclosure document and the deal could still go ahead, but now an agent must speak up about problems.

"The accountability of the seller's agent closes the loop," says Peck.

He recommends that a property's grow-op history be mentioned right in the contract. (Although legally binding, the disclosure document is separate from the contract.)

Meanwhile, as a result of increasing concerns about grow-ops, the province has called on mortgage brokers to advise lenders in writing when they have not verified a mortgage applicant's credit history - and have simply passed on applications to lenders for final approval.

"We have asked the industry to be vigilant and to guard against mortgage fraud," says John Nunez, B.C.'s newly appointed deputy registrar of mortgage brokers, adding it's very difficult to estimate the costs of grow-op-related mortgage fraud.