Buyers Beware: SF Gate Highlights Hidden Costs in Northern California Property Deals Due to Humboldt County Cannabis Abatements
Humboldt County is known for its cannabis cultivation. [Photo of a legal farm in SoHum by Kym Kemp]
Screenshot of a previous Plaintiff against Humboldt County, Blu Graham using his abatement letter juxtaposed with his empty greenhouse, as evidence he was not guilty of cannabis cultivation as alleged.
As we’ve previously noted on this site, the Gate points out that a number of properties on the market have been previously used for cannabis growing and carry hefty fines and tax liens imposed by the County of Humboldt as a result. These “abatements” for unpermitted cultivation can transfer to new owners, leaving them responsible for expenses that may reach into the millions. “Most of these growers just left, and a lot of these abatements are 8, 5, 10 years old, and they haven’t been corrected. And they’re only going to be corrected once someone else buys them and does the corrections,” a Humboldt County Real Estate agent, Marcus Schaible told SF Gate.
The deep price cuts seen in areas like SoHum reflect not only the ongoing collapse of the local cannabis industry but also the hidden costs associated with these properties, according to the Gate. For instance, the Gate points out that a 40-acre parcel with rolling hills and a pond is now listed for $249,000—a sharp decline from its $1.5 million selling price in 2019.
The Gate quotes Laura Lasseter, the director of operations for the Southern Humboldt Business & Visitors Bureau, as the cannabis crash is hurting the local economy. She states for them, “It’s been in crisis mode for a long time… .”
Property experts like Ryan George, founder of the cannabis real estate website 420Property.com, advise potential buyers to be vigilant in the article. “Potential buyers should indeed be cautious,” he warned. “It is essential to thoroughly investigate any property for existing municipal or county violations and the associated remediation costs or fines.”
Rainbow over the rural hills of Humboldt County during the summertime. [Photo by Kym Kemp]
As the cannabis market continues to influence property values and the liabilities tied to previous cultivation, the Gate article urges buyers to proceed with caution and conduct thorough due diligence before making any real estate investments in the region. This may further impact property sales and continue to drop not only land prices but the property tax money that Humboldt County stands to collect on these depreciated properties in the future.
Earlier:
- Penalties, Costs, Fines, and Fees: A Deep Look at the Humboldt County Cannabis Abatement Process
- Punished for Another’s Crimes: Humboldt County Demands New Owners Destroy Any Unpermitted Building Used for Cannabis Cultivation
- ‘Buildings for Rich People’: Part Two of Punished for Another’s Crimes, a Look at the Ramifications of the Abatement Process
- Humboldt County Cannabis Abatement Program “Unconstitutional,” Says the Institute for Justice Which Today Filed a Federal Class Action Lawsuit
- Humboldt County Files a Motion to Dismiss the Institute for Justice’s Federal Class Action Lawsuit Against Its Cannabis Abatement Program
- The Pressure Is the Point’: The Institute for Justice Has Filed an Amended Complaint for the Lawsuit Against the Humboldt County Cannabis Abatement Program
- Federal Judge Dismisses Lawsuit Challenging Humboldt County’s Cannabis Abatement Process
- Undeterred: After Judge Grants County’s Motion to Dismiss All Claims Against Abatement Program, Plaintiffs and their Lawyers Appeal
- Humboldt County Strikes Back With Response to Institute of Justice Claims in Federal Class Action Lawsuit Against the Cannabis Abatement Program
- Humboldt County Cannabis Abatement Lawsuit Moves Forward in the Ninth Circuit Court of Appeals with a Reply Brief From the Institute of Justice
- Ninth Circuit Hears Appeals in Landmark Case Against Humboldt County’s Cannabis Abatement Program
Join the discussion! For rules visit: https://kymkemp.com/commenting-rules
Comments system how-to: https://wpdiscuz.com/community/postid/10599/
Of course our wonderful real estate agents will avoid all accountability.
It would be a very interesting interview with the County Tax Assessor, on the most effective way to get ones property taxes brought down to a realistic amount, now that Humboldt County Property has basically zero resale, or current market, value…
If a property had been abated, it’s virtually worthless, and will likely never sell again, in the foreseeable future, so how can the County Assessors office possibly continue to justify a valuation based on a no longer realistic assessed value…???
And if Humboldt County property, even if it hasn’t been abated, now has the reputation of being an unaffordable risk, at any price, AND considering the fact that it isn’t even selling at even a small fraction of it’s previously overblown greenrush price, then it isn’t unreasonable to expect a significant reduction in assessed value to be automatically applied.
Hypothetically…
A user friendly entity or LLC, could be developed that legitimately purchased a now worthless Humboldt County property for $1, with a an open ended lease back to the seller for 1 cent annually, all rights to the seller legally reserved, like the right to sell it for what the market will bear, as if they still had complete ownership.
Then this new entity would just be technically responsible for paying the County just 1 cent per year, per parcel, to the County for property taxes, which would be considerably more than the County now deserves, under the circumstances, IMO.
1 dollar is fair market value, as far as I am concerned, since the County of Humboldt has created a situation that has rendered our properties resale or fair market values to being somewhere between worth less and maybe being completely worthless…
We just need a trustworthy legal representative to work out the details…
Once property starts selling again for it’s current market value, it could be structured to go back on the tax rolls assessed at the new purchase price, which would then be realistic and fair.
End of Hypothesis.
Something must be done.
We are getting fleeced by our own County.
They need to be reined in, before the damage they are creating becomes beyond repair…
I get a homework assignment for he county every year where I have to list everything my business owns, so that they can tax me on it. Tools and equipment that I paid sales tax to purchase and income tax when I use them to earn a living.
And what services to I receive in exchange? Nothing.
I bought a property in a legal transaction that seemed undervalued by the county, they came in person and looked and reassessed for additional 80k. They are not only bound by the sale price in tax assessment unfortunately.
It would be cleaner to reduce the abatement for new owners. If they’re selling that much cheaper than assessed value the new owner can afford to pay a reduced abatement and move forward legally. The county would recoup something and there would be incentive for people to purchase the land but it doesn’t have to be a dodgy LLC scheme. Under your scenario the county would be better off repoing the land and put people to work growing vegetables for school lunches.
Willits Resident said:
“Of course our wonderful real estate agents will avoid all accountability.”
Every Seller and every Real Estate Agent has a duty to disclose anything that could have a material effect on the value. If they did not disclose things they knew or should have known about, they can be held liable and have financial judgements entered against them.
Every case would depend on the facts associated with the purchase of an individual parcel or parcels.
At a minimum, from May 22, 2020, when Nicole’s first article in this series was published, every agent working in Humboldt knew or should have known.
Depending on the amount of coverage before then, that date could be pushed further back. It could be different for individual agents based on how active they were or if it can be shown they previously sold property subject to abatement.
As far as property values and property taxes it would be interesting and timely to interview the Assessor.
Obviously, the price of land in canna grow areas is collapsing, often whether the property was used for cultivation or not.
I believe the Assessor has a duty to reassess property once she is aware that values have dropped in specific areas.
Reassessments are specific to each property and are generally based on sales price or comparable sales. But the sales price has to be an arms length transaction at fair market value.
Using the 40 acres in the story that’s listed for $249,000 (down from $1.5 million in 2019), let’s say it sells for $240,000. The Assessor may accept that sales price or may find what she considers comparable sales that show a higher value.
Let’s say the Assessor sets the value at $275,000 – that will become the new Assessed value unless successfully appealed.
But if the Assessor finds that the sales price was bargain basement based on the need to spend $500,000 to correct code violations (grading, building issues) then she can add that to the sales price of $240,000 for a new assessed value of $740,000. which would be subject to appeal.
So yes, collapse of the cannabis economy is depressing rural land values, especially in some areas. On top of that, the County’s abatement scheme is further depressing property values if there’s any chance the property could be subject to cannabis related code enforcement.
What won’t work are clearly below market sales prices. If the 40 acres “sells” for $100,000, that won’t result in an assessment at that level. The Assessor will consider all other relevant factors, including all the improvements, the listing price, and especially comparable sales.
Again, every reassessment will be done on a case by case basis based on the factors unique to each individual property. This is true whether reassessment is triggered by a sale, requested by a property owner, or initiated by the Assessor.
If someone bought their property in Salmon Creek in 1990 they’re not likely going to be able to reassess at a lower value. But if their neighbor bought in 2015/16 or later they could be in line for a significant reduction. Just make sure you quietly clean up any possible building code issues prior to filing for reassessment!
How much longer, in your opinion, would it be ethical for the tax assessor to continue to collect taxes based on the obsolete previous sales price of $1.5 million, now that it lists for 249,000, assuming that there are no liens, etc…?
And what are the qualifications for it to be deemed a “pot property “? So are all the grow houses in Arcata, Mck , Eu etc etc etc. being evaluated as abatement prior extortion properties!?
Potentially…
Best not to take a chance on buying into one of those, either, just to be safe…
Thank you! Just thought of this angle…what you say extortion county clowns! Every other house, garage was growing…double standard
Im not sure there are many grow houses left anyway. The indoor market died years ago.
There sure were a lot of them 5-10 years ago…just ask the PG&E Care program – they (growers) fkd that all up for the folks who needed it…
Indoor sells much easier than anything else
Arcata and Eureka are incorporated cities and not subject to the County’s code enforcement policies.
At least they are “safe” from the awholes 😂
Illegal subdivision is a huge issue as well.
Excellent summary of a complicated issue. I hope your long efforts to shine a light on this issue, now joined by another news source, will move the needle on the controversial behavior of the planning commission blaming newcomers for the sins of the past.
We need buyers that want to live here for its innate beauty and rich diverse culture. There has to be a middle ground to protect the counties resources while supporting newcomers. There is a generation of city-born folks that wish to live a quieter, non-material, non-status obsessed life that wish to become part of the original back to the land movement. These are not the urban-green-rush disrupters of the last decade. I work from home over the internet. Every week some coworker I have not met before hears where I live and asks about how to move here. These are folks that bring money into the county, legally, don’t compete with locals for jobs, and are quick to hire local tradespeople.
Urban culture is primarily status based (wealth, material ownership). Rural culture is primarily character based (honesty, work ethic etc.). This younger cohort of wannabe newcomers want to to live in a character based culture.
Well said!
For folks who are struggling for a definition for this, it’s called theft.
Humboldt Board of Supervisors could do so much to improve this situation by associating the Marijuana related fines to the original perps instead of the land.
Well, if you bought it, it was probably obvious that weed was grown…
What I don’t get is why environmental law has not interfered with folks who grew in their garage, sunporch or right out in the open, 100 plants, completely ignored by LEO’s, in towns like Yuba City…
Houses get sold more often than Pot Farms in Humboldt, Trinity, Lake, Mendo and yes, Butte, Nevada etc…
This is a California issue, and it is about time media exposure reveals financial misdeeds and environmental issues which include Pot…
Real Estate Agents and Brokers have a pile of documents, and even have to disclose if the property had a history of dead people in the house…
A blanket disclosure of everything that ever happened on a property would be laughable, but this mess is being brought to you by out-of-control government, particularly in the “Triangle”, which mostly ignored environmental degradation as long as the growers paid their taxes and bought their Tundras from local dealers…
Fines and remediation should follow owners, and, titles should not be transferred if absolutely every liability and law has been faithfully obeyed…
It’s was always the fault if ineffective, incompetent local and State governments, and it still is…
I thoroughly agree with you that the fines and everything else associated with the pot should follow the previous owner and have nothing to do with the purchasers but ford needs to justify his over inflated wages.
Fish & Wildlife, State Water Board and others knew about the environmental problems for decades and did nothing prior to “legalization” when they were allocated tens of millions of dollars annually for enforcement.
Instead of going after the real outlaw growers they focused on the poor fools trying to get permits.
Legalization killed more family farms in 3 or 4 years than all the State and Federal pot raiders did in 50.
the County Code Enforcement fines can be settled for for a fraction by the new property owner (ie. 10k per million). The cost to deal with NOVs from CDFW and/or the SWRQCB will never go away and only cost more as the years go by. Some of the NOVs can cost over a million dollars to deal with.
The bad publicity, extortion, etc just fuks us all $ from trying to sell and get the fuk outta here, due to this corrupt, idioctic, mindless, direction – its too bad we’ve let these bottom dwelling skum bags get this infested in our community!
I count myself among the more fortunate abatement victims. Ed Denson ( rest his soul) saved my family from a $90,000 fine imposed by the county. Not only did we not grow cannabis on our land, no one in our family had even visited the property in this century.
Well owners are responsible for keeping watch over their property. You & your family failed to do that.
You should have been forced to pay.
Besides, “didn’t visit in this century”… bullshit.
And even if that was true, it is only been 24 years.
Be cool if Big properties in the mountains could go back to nature.
Most people are greedy and out to make a quick Buck.
Maybe this will slow land grabbers down?
Most of it will likely pass through the timber companies’ hands, with associated plunder.
Good, we need sawmills.
I agree, to a certain extent…
But, there’s a limit.
They have already been laying guys off periodically, for short periods, due to overproduction…
We need old growth forests.
Well those are gone & will never be back.
Property grab by design
After being through several property deals in Northern California. Multiple visits to different accessors offices and tax agencies yes, they are supposed to disclose and do their due diligence but if they miss it good luck. So many things are overlooked and by the time you drag it through a local court system you’re spending more than what the issue was in the first place or you wind up being strapped with so much additional fees it’s just overwhelming. Another issue to consider is also back taxes not paid. Not being able to get title searches done. Pushing sales as is with no inspection requirements that’s the one that really gets you caught in the ringer buyer beware. As far as property sales go if it seems too good to be true it really is.
When is someone going to run against Ford? I’ll vote for anyone else.
It’s not an elected position. Nor does he set policy. Maybe you should blame the Supervisors who are elected and who do set policy? But the recent election shows the majority of Humboldt voters are happy with self-serving Supes with massive conflicts of interest.
Got too love the dope business. It keeps giving and giving long after it is gone. Stay classy San Diego. Our you going too pay off you’re fines before selling. Are tax base hopes so
How about all the landowners getting screwed by county policy that are having their land values affected for no reason? Talk about classy. Did you mean our local tax base?
Sounds like the county is creating a situation where they run the owners off then take the land in the future for nonpayment of taxes. They can then nullify the leans and sell the land.