You are a mortgage broker who lends your own money on the security of real estate.
In addition to the usual risks associated with lending money, your loan security is at risk if the real
estate houses a marijuana grow-op (MGO). An MGO is a location where marijuana is cultivated.
Alternatively you are a mortgage broker being asked to find a lender in a transaction where
there is a suspicion that the property offered as security houses an MGO. Perhaps a borrower has
come to you wanting to refinance a property where he suspects the tenants are housing an MGO.
Do you have any risk factors to assess regarding the MGO or of which to advise your clients?
is article will provide you with some information as to the effects of an MGO on property
value, marketability, mortgaging, possible forfeiture and related matters.
How can you detect an MGO? is article will also provide you with some indicators that a
property is housing an MGO.
Impact on Property Values,
Selling and Mortgaging
A property which houses or has housed an
MGO suffers reduced valuation, marketability
and suitability as mortgage security. It is also
at risk of being forfeited to the government.
Following is a look at some of these matters.
Reduced property value – MGOs damage
the real estate where they are located and cause
the property to lose value. e reduction in
value is partly because of the damaged state
of the property but it tends to continue long
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| summer 2015 mbabc.ca MORTGAGEBROKER
Risky
Business
Dealing with a property that's been linked
to a marijuana grow-op? Don't get caught
in the weed(s)
By Ray BaSI
