The legalization of marijuana here raises a lot of questions for home buyers and sellers. What can we learn from Colorado?
By Megan Turchi staff

Part one of a two-part series on marijuana and the real estate market.

You’re putting your home on the market. The photographer is coming. The open house is set. You’re tidying up and spot your marijuana plants. Should you remove them?

The answer depends on whom you ask and isn’t as (um) cut and dried as you might think.

The passage of Question 4 in November 2016 made it legal for people 21 or older to use marijuana for recreational purposes in Massachusetts. Each person may grow up to six plants, with a limit of 12 per household. But it’s still a federal crime, and the disparity has led to confusion in states like Colorado, where recreational marijuana has been legal since 2012.

OK, so it’s legal here (and in some form in 26 other states — soon to be 29 — and the District of Columbia), but growing marijuana could “set off legal problems at the federal and state level, and jeopardize a bank loan,’’ lawyer Dave Kopilak of Emerge Law Group in Portland, Ore., told Oregon Live in January. Under federal law, the homeowner growing marijuana has committed a federal crime, he said, and so will the people who buy the home if the plants remain.

Federally insured lenders usually have a clause in the mortgage that says the owners cannot conduct an illegal activity, he said, so the buyers could be found in default.

Scott Peterson, general counsel at the Colorado Association of Realtors, said buyers should be cautious when looking at properties with grow equipment or plants.

“Someone will put in their contract for the hydroponic grow room to stay with the property,’’ Peterson said, “then the lender gets ahold of the contract and says you can’t do this.’’

There goes the mortgage approval.

“I encourage sellers with grow operations, if they put their house on the market, to shut them down,’’ Peterson said. “A seller could create some liability for themselves if they have an open house and have an active marijuana operation; kids could get their hands on it.’’

And the people touring the house could steal it.

On the other hand, Peterson noted, leaving the plants or the growing equipment in the home could be a selling point, because some buyers view it as an amenity, particularly if there is a grow room.

Mike McDonagh, general counsel and director of government affairs for the Massachusetts Association of Realtors, knew that his industry would change after recreational marijuana was legalized, he just doesn’t know to what extent.

What he does know is that the state’s realtors need advice on how to sell homes with growing equipment and how to cater to buyers interested in cultivating their own. “We want to learn lessons from other states,’’ McDonagh said.

In an article the Colorado Association of Realtors wrote for its members in 2014, one of the main concerns was about growing operations and home inspections.

James Dobney, who owns a home inspection company in Vancouver, British Columbia (where medical marijuana is legal and recreational may be soon), said growing a few marijuana plants is really no different than having a few houseplants. What realtors, inspectors, and home buyers need to look out for are homes that have illegal grow operations, he said.

The most concern is about electrical modifications, Dobney said. To grow high quantities of marijuana, homeowners might change the electrical wiring to provide more light and heat to the plants. Too many plants can also lead to higher humidity in the house, causing moisture damage or mold.

“With larger scale operations, they will put in a ventilation system to move air around, so they will cut into walls and ceilings,’’ risking structural damage, Dobney added.

High Times, a magazine dedicated to all things weed, recommends using some type of horticulture lighting, even when growing just one plant, because marijuana needs a lot of light. Other recommendations include using a type of container that allows water to drain, preventing mold.

A Colorado state-run website cautions home growers to have their lighting and other equipment installed by a licensed electrician, ensure there is proper ventilation to get rid of heat and moisture, and to “make sure the walls of your grow area don’t easily absorb water (painted concrete or plastic are best).’’

But how can buyers protect themselves?

Realtors are not required to disclose whether the owners grew or smoked marijuana in the home, McDonagh said, but they must report any material defects like mold.

“If a seller modifies systems in the property to cultivate and they didn’t pull the proper permits, that would be a disclosable issue,’’ McDonagh added.

But what if you are growing plants and damage your home?

How the insurance industry would respond remains murky. “The question would be whether the insurance policy would cover it, given it’s not legal under federal law,’’ McDonagh said.

The Massachusetts Division of Insurance does not tell insurers how to deal with damage caused by growing marijuana. “All property insurers that are licensed in Massachusetts have underlying guidelines . . . and can underwrite properties of their choice,’’ said Chris Goetcheus, spokesman for the Division of Insurance.

He compared it to the liability-coverage stipulations home insurers make regarding trampolines or homes with certain kinds of dog breeds.

“Whenever there are potential hazards, underwriters are going to look at that,’’ Goetcheus said. “How they are going to treat people growing six plants is unknown at this time.’’

Goetcheus said there is some uncertainty in the potential effects marijuana could have on the insurance industry.

If the Colorado insurance industry is any indicator, not much might happen at all.

Bobbie Baca, director of property casualty and title and consumer services for the Colorado Division of Insurance, said she’s received only a handful of complaints regarding homeowner’s insurance and marijuana. One was regarding a wildfire that damaged a home and the owner’s plants. “They didn’t pay the consumer for the plants that were lost,’’ Baca said.

Baca said that there is no particular federal or statewide legislation that requires insurance companies to pay for certain types of damage. “It is more up to the insurance company on how they structure the policy,’’ she said, so if a home inspection turns up a grow room, it’s completely up to the insurer whether to continue the policy.

One luxury condo building in Boston has already decided how it will deal with the issue.

At The Residences at The InterContinental, the condo trust banned both smoking and growing weed.

So, should sellers remove their marijuana before they put their homes on the market?

“Embrace the industry,’’ said Scott Peterson, general counsel at the Colorado Association of Realtors, “but embrace it cautiously. It is illegal no matter what the state of Massachusetts or Colorado says.’’

Megan Turchi, a reporter for, can be reached at Follow her on Twitter @meganturchi.