On May 30, a house in Surrey changed hands for $450,000, although the 2,200-square-foot property had a rather edgy past. When a couple of buyers expressed interest, they found it difficult to get financing. Another buyer found Rowan Smith, a Vancouver-based mortgage broker, and the sale was made.

The house was once used for a marijuana grow operation, and Smith is one of a few mortgage specialists who deal with these properties.

“It’s a niche,” Smith told the Georgia Straight in a phone interview. “Even though it’s not the bulk of my business, I get a lot of referrals from other brokers. I don’t want to call it a loss leader, but if I can help someone out with a former grow-op, explain to them all the risks and the difficulties of doing it, they often don’t buy it. But they buy something else, and I end up doing that deal for them.”

Though buying former grow-op properties isn’t for everyone, Smith said it could be worth the risk for some.

“If they’re going to buy it, fix it up, and flip it off, then it can be worth it,” he said. “They could make a considerable amount. The downside is it’s getting harder and harder and harder to finance them. If someone’s going to live in it for an extended period of time, then it’s probably not a bad idea, because they can buy them below market value. But if they are concerned about resale, and they should be concerned about it, then I would encourage them to do something else.”

In the case of the Surrey house for which Smith arranged the mortgage, the seller bought the property at a discount in 2001 from a previous owner who was busted for cultivating cannabis. The buyer fixed the place and lived in it.

Just like the previous seller, Smith’s client is required to disclose the property’s history when the house is put up for sale. A new buyer would again have to find a lending institution willing to write the mortgage.

“It’s still treated with the same scrutiny as one that was just busted last week,” Smith explained.

According to Wayne Mah, a mortgage broker, major banks will not touch a property with a history of illegal drug operations. The few lenders that do so will require proof of remediation and air-quality testing even if the house has been sold and occupied before.

“Right now, there’s only two or three lenders in this market still doing them,” Mah told the Straight in a phone interview.

A number of reports give some indication of the extent of grow operations across the region.

The Vancouver Police Department stated in its 2009 annual report that there were 455 “confirmed marijuana grows” in 2001 and that the number dropped to 81 in 2008. On April 13, 2010, the City of Surrey put out a news release stating that 1,144 “locations were rendered safe” from March 2005 to December 2009.

A paper prepared for the Fraser Valley Real Estate Board in 2008 cited federal-government statistics indicating that British Columbia’s incidence of marijuana-growing operations is 79 per 100,000 population, which is almost three times the national average. It also stated that 72 percent of B.C. cultivation is in the Lower Mainland and on Vancouver Island.

According to Dion Dunbar, general manager of Masters Remediation Services, it takes an average cost of $10,000 to clean up a house where marijuana was farmed.

In a phone interview with the Straight, former FVREB president Kelvin Neufeld noted that there are thousands of active and former grow-ops across the province.

Despite potential health and safety risks from living in former grow houses that haven’t been properly fixed, Neufeld observed that “there are a lot of people that don’t care because they’re buying a grow-op that’s worth less money and, therefore, they can have a house.”

Neufeld added that the FVREB is pushing a number of recommendations regarding former grow-op properties, including having standard procedures for reporting and remediation of these houses.