Stigmatized Properties…

‘Stigmatized properties’ that were crime sites often leave buyers and renters wondering who to call

BY TODD COYNE, VANCOUVER SUN JUNE 12, 2010

They are the scenes of crimes, murders, suicides, even reputed hauntings. In the real estate industry they are known as “stigmatized” or “psychologically impacted” properties, and the consequences of buying or renting such a home can be devastating, even fatal.

But while the rules for selling a home require disclosing whether the residence has ever been used for a marijuana-growing operation or illicit-drug lab, the onus is solely on the buyer to find out whether the property has been tainted by other criminal activity or tragedy.

And for renters, there are no rules.

These buildings may be structurally sound and in accordance with all building safety codes, but could nonetheless bring real dangers for new occupants who might unwittingly inherit the baggage of previous tenants or neighbours. A Cranbrook couple was brutally murdered last month in their recently rented home in what police are calling a tragic case of mistaken identity.

Leanne MacFarlane, 43, and Jeffrey Taylor, 42, had just moved from Salmon Arm to a home on MacFarlane’s brother’s remote property east of town on the Crowsnest Highway.

What the couple likely didn’t know, however, was that the home’s previous tenant was Doug Mahon, a 38-year-old man with ties to drugs and organized crime who is free on bail awaiting trial for attempted murder for his role in a shooting outside the Sam Steele Hotel in Cranbrook late last year.

The couple, who have grown children and grandchildren, had only been at the residence three months when early on the morning of May 29, two gunmen clad in camouflage broke into their home and shot them both to death before fleeing.

Cpl. Chris Faulkner of the East Kootenay RCMP, which is investigating the double homicide, said that his department has been questioning Mahon in connection to the killings. Faulkner said he could see no clear motive for the couple’s murder unless it was a targeted hit that found the couple in the “right place at the wrong time.”

Faulkner said police are powerless to warn potential renters and buyers about the criminal ties that real estate properties may have, saying that was the responsibility of the B.C. Real Estate Association (BCREA).

“We certainly can’t go out of our way to do that,” said Faulkner. “If we did, we might be open to libel. So I’ve never heard of it.”

Not only do real estate laws in B.C. not define stigmatized properties nor require sellers to disclose circumstances such as a sex-offender in the neighbourhood, a notorious previous owner or violent crimes that have occurred on a property, but a seller need not reveal a property’s history should they deem it against their interests, according to documents published by the legislative Real Estate Council of B.C.

“Sellers may refuse to answer questions about such potential stigmas,” reads the RECBC’s disclosure rules for stigmatized properties. “For serious concerns, consumers are advised to make inquiries to local police.”

As evidenced by Faulkner’s statements, however, police cannot legally reveal details about previous or ongoing troubles at a specific address.

“It’s happened a few times where a grow operation used to exist in a house and some people broke in to do a grow-rip and there’s different people living there. It’s a very unfortunate situation,” said Tyler Davis, spokesman for the Real Estate Council of B.C., saying there was little that the council could do to stop these situations from occurring.

“If there’s physical damage to the property, by all means that has to be disclosed,” he said. “But if there’s a situation where organized crime was going on in the area or on the property … ask the neighbours, ‘What’s going on next door? Have you ever seen the police outside?’ ”

So while the lesson is still “buyer beware” when it comes to stigmatized properties, B.C. has made strides in warning the public against buying properties which have been used as grow operations or drug labs.

A provincewide measure introduced in 2004, amended B.C.’s property disclosure statements so that anyone selling real estate is legally obligated to tell a potential buyer whether or not the property has ever housed a marijuana grow operation or any other illegal drug manufacturing enterprise such as a methamphetamine lab.

Since as far back as 2000, however, the City of Vancouver has taken its own measures afforded it by the Vancouver Charter to flag repeat-offender properties with an explicit “warning to prospective purchasers,” regardless of whether the property is even for sale.

The City will recommend one such warning be attached to the title of a three-storey warehouse at 1826 Triumph St. in east Vancouver this week after the property’s second major grow operation in six years was discovered in late March.

Coun. Ellen Woodsworth, vice-chair of the committee that issues the warnings, said the warnings are issued in concert with the Vancouver police department’s Grow Busters program to any building that has twice been found containing a grow operation or illegal drug-manufacturing facility.

“It doesn’t happen very often, but if it was on the first occasion that we issued these, certainly we’d see a lot more coming before us,” said Woodsworth. “It’s a notification to owners that they are responsible for whoever rents their buildings.”

The owner of the Triumph Street address could not be contacted, but Woodsworth confirmed that the owner had not been personally using the address but renting it out to others.

“The first time our inspectors go in with the police and do a bust on a property, we cut the power to the property to address safety concerns,” said Dan Johnston, director of the city’s Licensing and Inspections Department.

“Once that’s done, they receive a penalty of $1,700 and then it costs them $1,200 to get new permits to reoccupy the building.

“In addition to that, we require that they hire the services of an environmental consultant to basically review the building to ensure that the mould has been removed from the building.”

But if it is a repeat grow operation, said Johnston, his inspections branch asks city council to post a warning on the building’s title explicitly saying the property was twice used as such and has likely sustained serious structural and electrical damage as a result.

But for non-structural dangers such as gun-toting gangster neighbours, there are still no legal protections available to renters or buyers outside of their own investigative work.

“The public, on their own or through a realtor, should have a source to go to and say, ‘Has there been an illegal drug operation in this house?’ ” said Deanna Horn, president of the Fraser Valley Real Estate Board.

According to Horn, the real estate board is now working in concert with government, police and fire officials to create such a database where the public can go to identify real estate listings where criminal activities like drug production have occurred to avoid the potentially deadly risks that may be associated with these properties.

But ultimately, said Davis, whether the perceived dangers of owning or renting a property turn out to be real or not, everyone has their own ideas of what stigmatizes a property.

“For example, I don’t care if a house is considered haunted,” he said. “But other people might — particularly if they’re religious.”

Horn agreed.

“I had a property listed in Abbotsford four doors away from where the Bacon brothers resided,” she said, noting that while this “most certainly cut the value” of the home, it was not a lost cause.

“In the end — and this is the thing about a stigmatized property — the people that bought it knew about it and didn’t care. They work in the penal system and they said, ‘I don’t care.’

“They took the opinion that because there were cameras and the properties were under surveillance and there were police at the end, the street was safe.”

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