medical marijuana.have some questions.

[Terrel L. Shields]

If I were a lender I would not touch it with a ten foot pole. States can pass all the laws they want but the Feds are not "on board" and lots of growers are finding out the hard way. If a lender is apprised of the grow room, then if the feds step in, they can take the property and the lender could be on the hook not only for the siezed property but for concealing the crime...and yes, state law or no, it is still a crime to grow under federal statutes.

 

[Fritz in NY]

Its all "personal property" it dose not stay with the structure. If it meets code, and has no health and saftey issures, I'd let it slide. It's a personal issue/charateristic only.

 

[Terrel L. Shields]

I'd let it slide

If you don't disclose it, what would happen in a seizure? Wouldn't you be sued for the loss? Why wouldn't you? Again, the growers themselves know the state does not have the ultimate authority.
[url]http://www.cannabisnews.org/initiative-or-no-federal-law-trumps-state-on-marijuana/2012/09/06[/URL]

And USPAP has a little ditty about "on site or off site" factors that affect value.

And if you do disclose it - what bank would lend money? States love to seize property and one local county is having a sale of "personal property" that was seized in drug busts today (Sat.) here.

 

[Delta85]

I hope all you appraisers pushing for snooping and investigative work and informing the client of homeowners personal activities are doing so only after becoming competent in local, state, and federal criminal law. To not be competent in these areas would be a USPAP violation if you are now accepting them as part of your scope of work.

 

[Alpine]

States love to seize property and one local county is having a sale of "personal property" that was seized in drug busts today (Sat.) here.

It’s noteworthy that most of those here who are so determined to violate the privacy of borrowers who adhere to their local and state laws are from states without measures granting citizens these freedoms to self-medicate. Apparently they’ve never been forced to confront the man in the wheelchair who tells them that he’s bound to it unless he can ingest a specific strain of cannabis which is difficult for him to find, and which he must grow himself, suffering unnecessarily while it matures, when he can bake it into an edible which, when ingested, allows him to actually walk around his house.

Or the woman who reversed her severe weight loss during chemotherapy by growing a few “weeds” in her garage. Or the man who was able to overcome his dependence on pain-killers for his chronic, excruciating back pain, and thus also free himself from their organ-damaging side effects. His wife says the only side effect of his cannabis use is that he spends too much time smiling and coloring with his grandson—things he could not do before a friend insisted he try medical marijuana after he had staunchly opposed any use of it for 60 years of his life.

For those of us who work in states which have legalized and regulated it for more than a decade (1998 in Oregon), it’s appalling to see the moral intolerance proffered here under the guise of due diligence. To me, speculating on whether a property will one day be seized due to “illegal” activity has nothing to do with its use, condition, or market value as of the effective date of the report. It’s like opining that a property adjacent to an interstate or airport may someday be taken by eminent domain if the Feds decide to expand those facilities. Even those instances have more validity or potential impact on present value than the cultivation of medical marijuana by a patient who follows state laws. I would wager that many more of the properties we have all appraised were seized or otherwise suffered depreciation for a host of other truly drug-related or criminal activities which occurred there long after the ink was dry on our appraisal, than due to a bona fide patient growing a few plants.

I opened our local Weekly newspaper this morning to a half-page color ad by an area physician advertising that readers suffering from a host of listed ailments may qualify for a medical marijuana card. The copy: “It’s Your Medicine. It’s Your Right. GET LEGAL!” I recognize that many of you don’t live in similarly progressive states, but we are talking state laws here which have been in place for 15 years. In Oregon, we also have a Death With Dignity law passed in 1997, which “which allows terminally-ill Oregonians to end their lives through the voluntary self-administration of lethal medications, expressly prescribed by a physician for that purpose.” I’ve appraised properties wherein the borrower or a resident stated that they had the prescription and were prepared to use it. Should I run back to my office and cry foul to the client, that the borrower might off themselves and default on the loan? Or that their family member may commit suicide in the home, which may negatively impact subject marketability if it becomes known to the buying marketplace? If, if, if…

We are not fortune tellers or fascists. I personally place more emphasis on respecting someone’s rights than predicting the future acts of a homeowner or the more militant factions of federal law enforcement. Some of you may need to grow some enlightenment in your basements….

 

[PropertyEconomics]

I know of a home that was "arrested" by DEA ... the result was the lender was forced to wait out the "arrest" period .. in the mean time no one was allowed on the property or to maintain it .... ya I think it is a factor of disclosure.

 

[Lobo Fan]

I have been on both sides of this question. I once entered a rental unit that had a bag of pot sitting on the coffee table. It looked to be about an ounce, so it was not enough to get anyone arrested. I think one ounce or less is just a ticket. SioI just placed a magazine over it for my living room photo.

However, if you go into a garage with a 200 plant hydroponicc operation, then that might incur the interest of te DEA.

It is the feds that are the problem. Growing weed at all is a violation of federal law. The DEA can seize the property and sell it at auction, like they do with the cars of drug dealers. If a lender lost a house that was recently appraised and they could prove that the appraiser knew or should have known and did not disclose, it could get very expensive. I don't think you could oount on your E&O either.

 

[wickedness1]

We appraise the realty. Period.

My advice to the OP is that if the local authorities have signed off on the structure in its current condition then don't worry about the horticultural occupancy of the unit. That includes it's plumbing and electrical connections and systems. A meth lab is different because of the hazardous materials conditions. If the appraiser makes any noises you can remind them that appraisals are about the realty interests of a property, not the personal characteristics of the occupants. And then direct them to this thread to read up on the reasoning.

To the OP: Mr. George Hatch is a very well respected member of this forum and IMO always gives excellent advise and answers. He's proves yet again what a great resource our appraisal community has as well as the public.

In my personal experience, I have never come across a "grow room" however, I have come across several "sex chambers" in which the HO's have done expensive "renovations" to attics and basements. Nothing that couldn't be taken out (so no structural damage to the dwellings). One HO had a complete fit when I insisted on seeing his attic. It is what it is, nothing illegal and no ones business but the HO's. I consider your situation the same as long as permits were pulled to insure electrical, plumbing etc. was done to code.

The last thing you want to do is give the appraiser the feeling that you're "hiding" something. I had one HO "hide" their crawl space....covered the opening with an old refrigerator and a bunch of Christmas decorations, etc. I made them move everything so I could get to the crawl...low & behold the crawl had about 3 feet of raw sewage! I knew that house stank!

My point is you've done things legally, so don't hide it.