[REN #446] New Pot Laws & Old Tenants Contracts

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A Smokin' Hot Pot REIT

The legalization of marijuana in California and other states is creating some confusion over the use of pot in rentals. Landlords and property managers may not have provisions in leases covering pot use because laws are too new, but they may still have options for setting and enforcing their own rules.

The legal use of both medical and recreational pot is a growing movement among many U.S. states. According to ProCon, which publicizes controversial issues, 29 states along with the District of Columbia have legalized medical marijuana. Eight states, along with DC, have made recreational pot legal. But, under federal law, pot of any kind is still illegal (1).

Because of the conflict between state and federal law, landlords are among those in unchartered territory when it comes to setting policy. It doesn’t matter whether the property owner is for or against the use of marijuana. He or she must come up with rules that respect at least one version of the law along with the rights of all tenants, and the need to keep buildings safe and well-maintained.

Landlord Has Last Word

There are many things to consider in regards to the use of marijuana by tenants but it’s the landlords and property managers who set the rules. As Seattle attorney Bret Sachter told Zillow, “The landlord has the last word, and can ban the smoking of marijuana just like they can prohibit cigarette or cigar smoking.” The smoking of marijuana may be the most troubling aspect of the new law because many people just don’t want second-hand smoke in their lives (2).

Smoke residue can also damage rental units. Like cigarettes, marijuana can leave behind an odor that’s costly to clean up. Landlords that ban cigarette smoking may also want to ban marijuana smoking. In fact, they may be forced to if other tenants have been promised a “no-smoking” environment. Smoking can also increase the risk of fires, and the cost of insurance, which is something to avoid.

Toronto property manager, Dan Henderson, said in an interview, “It’s not the stigma of marijuana use, it’s just the number of expenses to maintain the unit and the complaints landlords receive from the neighbors.”

Woops! It’s Not in the Lease

If the wording isn’t already in the lease, and the lease is active, it may be a little more difficult to enforce apartment complex rules, but not impossible. Sachter said, it’s best to put marijuana rules into the lease, but if that can’t happen until the lease is renewed, landlords can resort to other ordinances.

Many local governments have rules against smoking in public places. Some have also banned smoking in apartment complexes, including inside individual units, because the smoke can drift. Those kinds of rules will also apply to marijuana. Landlords can also stand behind the infamous federal ban on marijuana by stating that marijuana is illegal under federal law.

Put It in the New Lease

When it comes time to renew the lease, or to sign an agreement with a new tenant, put specific rules into the lease. Landlordology said, those rules need to be explicit, especially if local ordinances ban smoking in public places, which might increase the chance that tenants will want to smoke at home.

Landlordology says that rental policy doesn’t have to completely “ban” pot smoking. It could require that tenants get written permission, and designate a specific area where pot smoking is permitted. It should also state any penalties for violating the rules (3).

Growing Marijuana

The “growing” of marijuana may also be an issue a landlord should address, in the lease. If the state has made it legal to grow pot in your own yard, a landlord can still ban the growing of pot on rental property with a clause in the lease.

According to Sachter, if the lease has already been signed without that clause, the landlord may need to rely on anti-drug policies that were “hopefully” included in the lease. Violations would need to be based on “breach of contract.”

If the renter continues growing the pot, after a written notice, the landlord could try to evict the tenant. Sachter said, if there’s no clause in the lease about the growing of marijuana, it may be difficult to keep the renter from doing it while that lease is in effect.

Landlord Obligation

Above all, the landlord is required to protect a tenant’s right to “quiet enjoyment” of their rented home. Whether or not a tenant’s use of marijuana is acceptable may depend on whether other tenants are bothered by that activity.

A medical marijuana patient might argue that it’s necessary for health reasons, and that he or she has the right to smoke their medicinal pot. But, in that case, the cigarette smoking argument would likely prevail, non-smokers shouldn’t be forced to breath unwanted smoke.

The use of marijuana alternatives that don’t involve smoking could provide a good way to eliminate the smoking issue. But, Landlordology warns landlords to be careful with this one. It said, a complete “ban” on the use of medical marijuana might be seen as discriminatory.

This podcast should not be construed as legal advice. I suggest that you review your lease agreement with an attorney to make sure you are covered by the pot policy you wish to enforce.

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(1) ProCon Article

(2) Zillow Article

(3) Tips for Landlords: Landlordology

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