Surrey house gets valuation discount for stigma as former grow-op

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There was only one issue before the B.C. Property Assessment Appeal Board regarding a house in Surrey.

It’s whether or not the home’s valuation reflects the “stigma” of having had a grow operation for weed.

Sukhmanprit Gill is the current owner of the residence at 6772 150A Street.

Gill believes that the 2018 valuation of $1,153,000 was too high because of the pot-growing history of the house.

The assessor’s office, through a submission by B.C. Assessment appraiser Joey Lee, argued that there is no discount in the value of homes that were grow-ops.

In a decision Tuesday (October 2), panel chair Candace Watson disagreed with the assessor.

Watson ruled that she is “not persuaded by the Assessor's argument that there is no stigma attached to a former grow op and therefore that no discount is warranted”.

Watson noted that “based on the limited market evidence”, a discount of 10 percent is warranted.

According to Watson, the reduction is “reasonable to reflect the effect of the stigma due to the fact that the property was a former grow op”.

The property is a two-storey single family residence on a 6,749-square-foot lot.

Homeowner Gill suggested that the valuation should be discounted by 17.7 percent to 24.4 percent.

In his submission, Gill cited three sales of former grow-ops that support his contention for a discount.

“The Appellant also argues that because of the former grow op status, several banks that he consulted would not provide mortgage financing and that the terms offered by credit unions such as Envision are onerous,” Watson wrote in her decision. “I agree that this is a factor which affects market value.”

The assessor’s office, for its part, cited three sales of properties near the home, but these are not former grow-ops.

“The Assessor argues that the 2016 and 2017 studies for grow op sales indicate that there is no discount in value for the stigma of having been a former grow op by comparing the sales of grow ops to their assessed values and then comparing the Assessment to Sales Ratios (ASRs),” Watson noted.

“This argument only holds weight if it is assumed that assessed value equals market value and I am not persuaded that it does,” the panel chair continued. “A more useful study would compare similar grow op properties to non-grow op properties and see whether a discount is indicated.”

To rebut the examples cited by Gill of former grow-op properties, the assessor recalculated the assessments of these homes to come up with assessment to sales ratios or ASRs. However, that did not help.

According to Watson, the ASRs indicate to her that B.C. Assessment was “over assessing these properties by 8% to 14% which implies that a discount in this range is warranted”.

With the 10 percent reduction, the property’s value will be $1,037,700 on the 2018 assessment roll.