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REAL ESTATE Banks almost busted Landlords and lending institutions are finding themselves tied up, having to answer for criminal activities on their properties. BY KEV IN MARRON tice," says Goldberg, a Calgary-based partner at Lang Michener LLP and a specialist in mortgage foreclosures. He says he never had occasion to look at the Criminal Code or think about drug laws since he was in law school 20 years ago — not until two major financial institutions recently faced the prospect of hav- ing their money tied up and having to answer awkward ques- tions in connection with raids on marijuana grow operations at properties on which they held mortgages. Both cases centred on a little-known provision of the fed- E eral Controlled Drugs and Substances Act (CDSA) that al- lows the Crown to seize "offence-related property," hold onto it pending the outcome of a criminal trial, and keep it in the event of a conviction. Innocent landlords and mortgage lenders might assume this doesn't apply to their interest in a property, but the Crown in British Columbia thought differently, and that is why Goldberg and his cli- ents ended up in court. It's one more way in which the seedy world of clandestine drug operations is impinging upon the respectable, if somewhat prosaic, realm of com- mercial real estate. As marijuana grow ops and methamphetamine labs have become big business, they have created hitherto unrecognized risks for landlords and lenders — risks that real estate lawyers need to consider in drafting leases and contracts and in advising clients www. C ANADIAN mag.com M AY 2008 19 ven in his wildest dreams, Lindsay Goldberg would never have seen himself in court representing cli- ents like RBC or Scotia Mortgage Corp. in connec- tion with drug busts. "This is something I never imagined coming up in the context of my prac- ILLUSTRATION: DARCY MUENCHRATH