Whether for or against legalizing marijuana, landlords and property managers need to know the facts about its potential impact on their business. If a study done by the NAMHSA is accurate, 7.3% of Americans aged 12 and over self-report regularly using marijuana, and the number of Americans who occasionally use it is likely astronomically higher. At some point during a landlord's tenure, it is likely they will encounter marijuana usage on their rental property.
Here are the facts:
Currently, only four states in the U.S. (Colorado, Washington, Oregon and Alaska) plus the District of Columbia have legalized the recreational use of marijuana, and that use is limited to regulated amounts of private growth and possession, with unlicensed sales and public consumption prohibited (much like alcohol). In other words, private citizens are legally allowed to possess, grow and smoke marijuana (in regulated quantities) in the privacy of their own homes; but are not allowed to sell any amount or smoke it in public.
In addition, nearly twenty other states and many provinces in Canada have legalized medical marijuana usage in some form. Interestingly, although legalized at a state/province level for medical purposes, it remains a federal crime in both the U.S. and Canada. Further, even within states with legalized marijuana, many municipalities have elected to prohibit cannabis dispensaries within their boundaries.
Landlords and property managers need to consider that tenants may want to exercise their new legal right to smoke marijuana (either for casual use in the states where allowed, or with a prescription in one of the twenty remaining states with legalized medical marijuana). In states/provinces where smoking pot is legal, landlords and property managers may wonder if they have the right to ban the activity from their properties. Or, will their existing "No Drugs" policy suffice?
The answer is twofold. Given the contradicting state and federal laws and lack of case law on the subject, all indications are that landlords and property managers can refuse to allow tenants to smoke marijuana on their properties even though it may be legal to do so in their state. While the states allow for individual use of marijuana in private spaces, it does not require owners to allow this use on their leased properties. Thus, it is left to the landlord's or property manager's discretion. Landlords/property managers are cautioned however that this may not remain the case forever. Consideration must still be given to tenants with prescriptions for medical marijuana; cases in which patients could claim a disability and possibly be protected under the federal Americans with Disabilities Act in the future.
The law, as it stands now, is clear that medical marijuana cases are not protected under the American with Disabilities Act.
There is little doubt that more medical marijuana cases will be brought in the future seeking protection under the ADA. However, for as long as marijuana remains illegal under federal laws, future cases will likely be met with the same fate as their predecessors.
Another area of consideration for landlords/property managers is how to show respect for physician-prescribed medical marijuana. One suggestion is to have separate policies for recreational usage, which could be protected under existing "No Drug" policies. Of course, any existing policies based on state law would have to be amended to include federal law, if landlords wanted to ban recreational use in states where marijuana use is legal.
A second policy could be implemented to address medical usage where residents are allowed to use marijuana but now allowed to grow it on the premises.
For landlords/property managers with multi-family units, who allow smoking marijuana on the premises, careful consideration must also be given to the impact on other residents. Issues such as selling on the property or resident complaints about marijuana-related odors in common areas could become an issue.
Landlords and property managers need strong and very clear policies on this issue to protect themselves and other residents. Signing a Marijuana Lease Addendum with the tenants is a great way to address the issue head-on and shift responsibility to the tenant.
Share your thoughts on this topic. Are you for or against legalizing marijuana? Will/do you allow or disallow its' use on your properties? Will/do you have separate policies for casual and medical use?
Part II of this article explores whether there are opportunities for real estate investors and landlords amidst the state-level push for legalization of marijuana.