Marijuana Bust

[machomacho]

So long story short about a month ago our house that was on rent was busted for marijuana and is now closed until further notice

Now I believe insurance usually doesn't cover this and we don't know how much the damages are right now but its a 600,000 house and if the damages are like 100,000+ we wont be able to afford it. What do you guys think would be the next step to do.

In the report it states are the heating and water supply was tampered with and there is severe molding in the house.

what would be the next step for us if the damages are that high?
Currently my parents have two houses under them would it be better if they switched them to my name and filed for bankruptcy?

any info would be appreciated
thanks

[Joe-G]

hmmmm pm'd!

[Type_S1]

How would they not know? It is nearly impossible for them not to.

That house is pretty much fucked. Damages will be soo much to fixed and just a huge headache for the owner. Insurance won't cover this most of the time as far as I know :dunno:

Whatever happens owner will be out a shitload of money...pretty much screwed.

[Guillermo]

LOL, "switch to your name and file bankruptcy."

[gram]

The house will have to be remediated. If there is mold in the house you are pretty much guaranteed that you will have to pull all drywall, flooring, insulation etc out of the house. If they have tampered with the wiring you may have to have large chunks of that redone as well and any structural issues will need to be dealt with. 100k might be a low guess-it really depends on how long the tenants grew in the house etc.

Once the house goes through the remediation process it is marked as an "ex grow" house and can never be sold quite as easily as before. The renters have not made life easy for you unfortunately-expect to lose $ on the value of the house as well as for the reno that will have to follow. If you do sell the house you will have to disclose to any future buyers that it was a grow op at some point or you can be sued.

[machomacho]

They were living in the house for 6 months and for the first 2 months there was an elderly family living there but after that we don't know

It seems like they have been growing since October

Ya were aware that we have to let the new owners know but we just don't know how we gonna be able to afford the damages

[bourge73]

Please provide the exact address for umm investigation purposes...
In all honesty just like the above smarts guys have said... the house has probably been seized by the province/city right? so ya your not getting it back, (sold via auction) and or its full of mold and its going to cost a fortune to fix easy 100+. On top of that insurance wont cover it and will never will insure it again. (grow ops are forever marked for death) yup your facked. You have 2 options. Get a very good expensive lawyer (really wont help) or call it a day and go bankrupt.

No good news sorry.

Lesson learned ? keep an eye on renters?

[FraserB]

Pretty sure that once all the repairs are done and the house is inspected and deemed livable again there is no record on the house. The letter stating the house being condemned will still stay on the CHRA website thought.

[HiTempguy1]

Originally posted by bourge73

No good news sorry.

Lesson learned ? keep an eye on renters?

No shit eh, why the hell wouldn't you drop by once a month to check in on things :nut:

[machomacho]

We've only put 30,000 out of our pockets and rest renter was paying for and said he would buy it in June 2011.. If we were to give this house to the city what happens to the mortgage? Do we still have to pay the 600,000?

[machomacho]

Originally posted by HiTempguy1


No shit eh, why the hell wouldn't you drop by once a month to check in on things :nut:



My parents were just out of town for last 3 months and I don't have a car anything .. The renter would always call and stuff we just never thought this stuff would happen since we've doing this for along time now

Just bad timing in life

[5.0]

Wow thats pretty sad that these people are just fucked because of their renters.

Is there any insurance out there that would cover a situation like this?

[Type_S1]

Originally posted by machomacho
We've only put 30,000 out of our pockets and rest renter was paying for and said he would buy it in June 2011.. If we were to give this house to the city what happens to the mortgage? Do we still have to pay the 600,000?

Seems very shady to me....

[Joe-G]

Originally posted by Type_S1


Seems very shady to me....

Not really? He probably means they put 30k down on the house. If they let the banks foreclose the home, there's no chance of them possibly making that amount back. As for the renters wanting to purchase the home in due time, id say that happens a lot? :dunno:

[gram]

What do you mean by "give the house to the city" Your mortgage is with a bank not the City of Calgary. You are still on the hook for the mortgage whatever you try. It sucks but you can't just give the house back to the city. You might be able to default on the house but I am pretty sure that the bank would sue you or your parents for diminished value due to the grow op.

[sabad66]

Originally posted by HiTempguy1


No shit eh, why the hell wouldn't you drop by once a month to check in on things :nut:
Really? I'd be pretty pissed if I had the landlord come by every month to "check up on things".

[C_Dave45]

You're carrying a $600,000 mortgage on a rental house? Jesus!! How much equity is in the place? Pretty much have two choices; spend the money to repair it and recoup down the road or just walk away and default on the mortgage. You say you only put $30,000 down? How'd you get a 600k mortgage with only 30k down?

[Tik-Tok]

Originally posted by C_Dave45
You're carrying a $600,000 mortgage on a rental house? Jesus!! How much equity is in the place? Pretty much have two choices; spend the money to repair it and recoup down the road or just walk away and default on the mortgage. You say you only put $30,000 down? How'd you get a 600k mortgage with only 30k down?

5% of $600g is $30g. I'm guessing they put it down as their primary residence so they only needed the 5%.

[FraserB]

Judging by the fact OP and his parents would have no problem committing fraud, and they thought of it so early, to try and get away from this I would say there is a lot more to the story.

[C_Dave45]

Originally posted by Tik-Tok


5% of $600g is $30g. I'm guessing they put it down as their primary residence so they only needed the 5%.
How do you say it's a primary res if you already own a home? The parents must live somewhere. They must own some other house. The banks would see them on title for another mortgage somewhere. And if they qualify the income for a $600,000 mortgage then they can afford the repairs. Something doesn't sound right.

[FraserB]

Originally posted by C_Dave45

How do you say it's a primary res if you already own a home? The parents must live somewhere. They must own some other house. The banks would see them on title for another mortgage somewhere. And if they qualify the income for a $600,000 mortgage then they can afford the repairs. Something doesn't sound right.

They probably have OP on one of the titles.

I don't think it would be too hard to figure out which house this is either. Recent grow op bust, roughly $600k. Can't be too many of those.

[crewchaud]

Originally posted by bourge73
Please provide the exact address for umm investigation purposes...
In all honesty just like the above smarts guys have said... the house has probably been seized by the province/city right? so ya your not getting it back, (sold via auction) and or its full of mold and its going to cost a fortune to fix easy 100+. On top of that insurance wont cover it and will never will insure it again. (grow ops are forever marked for death) yup your facked. You have 2 options. Get a very good expensive lawyer (really wont help) or call it a day and go bankrupt.

No good news sorry.

Lesson learned ? keep an eye on renters?


Just an FYI the house has not been seized (yet), the owners are just locked out by Helth Services until the owner has taken the nessacary steps to make it liveable again. The only time this house will go up for auction is if the owner decides to forclose on his mortgage at which time the bank/lender will file to sell the house with the courts.

If you have more then 20% down on this house then I would suggest sitting down with the bank and discussing all your options as it is in the banks best interest to work with you. If you have CHMC insurance on this place then the bank may not care to work with you because they are insured to the full mortgaged amount anyway so no loss to them.

I don't believe bankruptcy on your part will be an option here because in order for the mortgage to transfer over you will need to qualify.

Further more, unless CPS have directly connected you to the crime then they are done with your house. Your dealings are strictly with the city at this point.

[crewchaud]

I am going with one of these addresses:

http://www.calgaryhealthregion.ca/publichealth/envhealth/inspection_orders/Orders_Drugs/2010/Active/9_Morningside_Bay_SW_Airdrie_November_25_2010_A.pdf

http://www.calgaryhealthregion.ca/publichealth/envhealth/inspection_orders/Orders_Drugs/2010/Active/42_Evergreen_Common_SW_Calgary_December_2_2010_A.pdf

[xxviet]

Originally posted by bourge73
Please provide the exact address for umm investigation purposes...
In all honesty just like the above smarts guys have said... the house has probably been seized by the province/city right? so ya your not getting it back, (sold via auction) and or its full of mold and its going to cost a fortune to fix easy 100+. On top of that insurance wont cover it and will never will insure it again. (grow ops are forever marked for death) yup your facked. You have 2 options. Get a very good expensive lawyer (really wont help) or call it a day and go bankrupt.

No good news sorry.

Lesson learned ? keep an eye on renters?

wrong. you can get your house back its a small chance ; ) only if u can afford it. court in and out for 1 year, mortgages every month still gotta pay, lawyer fees + repair cost depending how long they have been in there and how much they grew, how old the house is....100k might be a little over exaggerated. maybe after every thing is said and done the whole thing can be settled with in 1 year for about 70k, be prepared to hire an amazing lawyer.
That is of course if your house gets seized, and how long they want to drag this case on.

[Tik-Tok]

Originally posted by C_Dave45

How do you say it's a primary res if you already own a home? The parents must live somewhere. They must own some other house. The banks would see them on title for another mortgage somewhere.

As I just found out myself, because I'm considering buying my parents place as a rental, if it's going to be your primary residence, you only need 5% down. You still retain title on your "old house". So someone could easily say it's going to be their primary, and "rent out the old house", put the new address on a few bills to "make it legit" (or make it seem legit), and rent out the new one.

I'm also guessing it was purchased at or near peak, when banks were handing out mortgages like candy, so no one was paying too close of attention.

[codetrap]

Heh, I think you might be better off burning it down.

[C_Dave45]

Originally posted by Tik-Tok


As I just found out myself, because I'm considering buying my parents place as a rental, if it's going to be your primary residence, you only need 5% down. You still retain title on your "old house". So someone could easily say it's going to be their primary, and "rent out the old house", put the new address on a few bills to "make it legit" (or make it seem legit), and rent out the new one.

I'm also guessing it was purchased at or near peak, when banks were handing out mortgages like candy, so no one was paying too close of attention.
I know the "INS and outs" of primary and secondary residences. I own both. That is why it seems fishy. Whatever residence is your "primary", the other one would be a "rental" property and your income must be able to support both your primary mortgage as well as at least 50% of the secondary one. (the banks will only consider 50% covered by rent even if the rental rate more than covers the cost of the mortgage. Unless, as Fraser says, they list their son on title (OP) as living in the second house as HIS primary residence. But a 600k mortgage??? That's, what, over $3,000 per month? Gotta have one hell of a total income for a lender to hand out a high ratio (95%) mortgage like that.

[machomacho]

I don't know the exact details on it, I just know how much was put down and not sure how much else was put into the house

I'll Keep everyone updated on what's happening but we contacted the police and the officer recognized the tenants and said we can sue him
For damages at their trial

Thanks for everyones input

[gram]

Make sure that the tenants have $ before you try to sue them-you might be wasting your time :(

[dexlargo]

TL,DR:

Your parents will probably have to fix up the house, and should probably get on it immediately. It might be in their interest to try and work with the mortgage holder.

Long answer:

Following are 4 points relating to: suing the tenants; the seizure of the home; trying to change the owner; and defaulting on the mortgage.

1 - Suing the renters: Easier than suing is to put in a restitution request with the prosecutor on the grow op charges. Should the bad guys be convicted of running a grow op, the court can order restitution be paid for the damages. They can either tie it into a probation order with a date for payment, so that if the restitution is not paid by that date, the person faces a criminal charge for breach of probation, or (the more likely outcome) they make a compensation order, which is the same thing as a judgment in civil court. The upshot is that you don't have to sue or spend any money on lawyers to get the equivalent of a court judgment in your favour. You'll have to provide documentation to support the amount that you are requesting, whether that is written estimates or actual bills for the remediation.

Contact the police victim assistance unit to get that request underway.

That said, I'd be shocked if you saw a dime of that money from the bad guys - usually they don't have any identifiable assets to seize and no legitimate income to garnish, so enforcing a judgment is extremely difficult.

2 - Seizure of the home: It's unlikely that the province would try and seize the home under the crime related property legislation, since the bad guys didn't own it or have permission to use it for the illegal purpose. I don't know this for sure so you might want to confirm it, but I wouldn't worry about seizure/forfeiture too much.

3 - Changing owner: Changing the owner of the property to change who owes the money and then that person filing for bankruptcy would be a fraudulent conveyence which can be unravelled in order to get at the original owners (your parents) for the debt. In any event, to do it you'd have to assume the mortgage (which may or may not require the bank's approval), or qualify for your own mortgage first, which is unlikely to be approved for the amount required, given the current condition of the home.

4 - Defaulting on the mortgage: If your parents decide to default on the mortgage, then the bank will foreclose and sell the home. They can go after your parents for any deficiency between what the home sells for and what your parents owe. Since your parents seem to have other assets, that will be a debt that they can pursue, and you better believe that they will. If it's a CMHC or Genworth insured mortgage, then substitue CMHC or Genworth as the party that will pursue your parents for any deficiency.

Conclusion: In the end, your parents will likely have to remediate the home, so they might as well get that underway as soon as possible. The longer that it sits empty in unlivable condition, the more money is lost through missed rental income and depreciation of the property - and likely further damage from vandals/squatters if left vacant. They might want to try and approach the bank that holds the mortgage and see if they will work with them in dealing with this situation - the bank doesn't want to be out a whole bunch of money either, so they might be willing to negotiate an extension of the mortgage to loan money to pay for repairs, excuse some missed payments, some other idea, or a combination. The key is to be reasonable - the bank will likely be shitting themselves that they're going to have to foreclose and lose a bunch of money, so a way out that prevents that might be looked on favourably.

[Xtrema]

http://www.disasterservicescalgary.com/growop.html

It's not going to be cheap.

I would rather rent out 2 $300K homes than 1 $600K home. Potential loss is much less. Most renters don't care about your stuff and damage deposit doesn't cover damages most of the time.

I had someone tried to do a minor grow-op in the early 90s and it's something I found out after tenant left. That's the last time I use a property management company to screen tenants.

[DayGlow]

best way to avoid this as a landlord is to put into the rental agreement that each month the landlord will give 24hr notice to enter the house to change the filter on the furnace.

[bourge73]

Yes you are correct. I am just making a point because the chance is very small and very expensive. I lived next to a busted grow op in Panorama Hills and in 3 years I was asked by 3+ lawyers and 4+ Private Investigators if I had any information on the previous renters. (which I didnt)

Fast forward 3 years nothing has changed the Health Inspection signs are still up and its still in court or "pending" This is before anything has been done to repair the house issues account the Grow Op never mind the countless thousands of dollars spend on the Lawyers and Private Investigators. Dont make it sound rosey this family is in for a hell of a ride and a shitload of cash. Of Course just IMO.

[D. Dub]

Originally posted by FraserB
Pretty sure that once all the repairs are done and the house is inspected and deemed livable again there is no record on the house. The letter stating the house being condemned will still stay on the CHRA website thought.

Nope it stays on the title, like a bad rash, until the house is torn down.

[D. Dub]

Originally posted by DayGlow
best way to avoid this as a landlord is to put into the rental agreement that each month the landlord will give 24hr notice to enter the house to change the filter on the furnace.

Brilliant.