How Will Cannabis Legalization Impact Home Value? 

How Will Cannabis Legalization Impact Home Value? 

Legalization is here! What does it mean for homeowners looking to buy or sell? We provide information direct from the registrar to shed some light.

In short, legalization does not significantly alter the existing disclosure requirements, however, many buyers and sellers will have questions about what this means for them. 


To understand disclosure requirements, it’s important to remember the distinction between stigmas that relate to a home’s past, and physical defects in the property.


A stigma is a non-physical attribute of a property that may trigger a negative emotional or psychological response in a potential buyer. 


What may constitute a stigma will vary from buyer to buyer, depending on their sensitivity regarding certain issues. For example, one buyer may believe a home where a single marijuana plant was legally grown is stigmatized, while another buyer may have no concern whatsoever. In Ontario, there is no requirement on sellers to disclose the existence of facts that may elicit stigmas in buyers. However, the buyer’s representative can make specific inquiries about issues that are important to their client. 


A defect, on the other hand, is a physical attribute of the property. Physical defects fall into two broad categories: 


  1. Patent defects are readily visible or can be identified during a home inspection that does not involve making holes in the structure or removing access panels. For example, damage or visible stains may suggest a water leak from the roof or a bathroom overhead. 


  1. Latent defects are not apparent and may not be easily discoverable, even by a home inspector or other expert. Examples of latent defects that must be disclosed include structural problems that render the residence dangerous to occupy or, wear or damage to utility systems that places occupants at risk.


It’s important to understand the difference between patent and latent defects as it applies to cannabis cultivation. Growing plants inside a dwelling may not necessarily cause physical damage to a property. If there is no physical damage or if the damage has been fully remediated, and therefore free of any defect, the home’s history is still a potential cause for stigma if it is a concern for the buyer. 


If you would like to learn more about cannabis cultivation & the laws surrounding it, go to: https://www.ontario.ca/page/cannabis-legalization