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Should Your Rental Lease Have a Marijuana Clause?

by Editor | ezLandlordForms

Imagine that the single family home you own in a quiet neighborhood was just leased to a family that moved from out of state. You pop by a few weeks after lease-signing to drop off extra keys and see how they are settling in. Instead of beds, sofas and other décor, you find that each room has been fitted with grow lights connected to hazardous tangles of electrical cords. Your tenants have stripped your house of furnishings and converted it into a greenhouse for growing marijuana.

That nightmare occurred in a Colorado city that has been known, not for its drugs and crime, but for art, a rich history and beautiful museums. In fact, Pueblo, Co., made Livability.com’s Top 10 Cities for Historic Preservation list. Yet, investigators who searched a rental home there in March found 127 pot plants and growing equipment worth more than $100,000.

Authorities arrested two Cuban nationals and said they appeared to be part of a drug cartel operation that was growing marijuana in Colorado for export to Mexico. The mayor of nearby Colorado Springs – who is also a former Colorado attorney general – claimed that the case was the result of laws that have legalized marijuana in the state.

Mayor John Suthers said that out-of-towners and foreigners are renting Colorado homes with the intent to turn them into industrial pot-growing operations. He said these tenants are “basically trashing the houses because they’re making so much freaking money they don’t care, and growing hundreds and hundreds and hundreds of plants in each house. And transporting it out of state to marijuana markets nationally and internationally. Literally. Marijuana is going back to Mexico from Colorado.”

Certainly not all marijuana use that follows changing laws is having such horrendous effects. But could what happened in Pueblo happen where you own rental property? Is it only a risk in states where recreational marijuana use is legal? What about medical marijuana? Do medical marijuana users have the right to smoke it in your rental units?

Why landlords need to know marijuana laws

Landlords today cannot dismiss the potential impact that increasing legalization of marijuana use has on their properties.

Medical marijuana has been legalized in 25 states and the District of Columbia. Although doctors can only recommend marijuana, not write a prescription for it, there are already more than 1.2 million registered medical marijuana users in the U.S. Four states – Alaska, Colorado, Oregon and Washington – permit recreational use of the drug. This year, at least seven states will host ballot questions during the November election on policies that could further expand legalization of medicinal and recreational marijuana.

In Canada, medical marijuana was legalized in 2001, making that nation the first to legalize the drug for medical purposes. Recreational marijuana use remains illegal in the provinces, although that may change very soon. The nation’s leading party is expected to introduce measures in 2017 that would decriminalize the recreational use of marijuana.

With so many changes in recent years, if you haven’t considered how you would handle marijuana use in your rentals, now may be the time to address it.

Indeed, it will soon become as common to attach a marijuana addendum to your leases as it is to add clauses that cover pets, guests and use of communal parking areas.

Do I need a lawyer to figure this out?

There are few issues more confusing for landlords these days than whether they can limit marijuana use by those living in their rentals. Federal and state laws on the subject conflict with one another. Landlords fear they could be charged with disability discrimination if they impose a categorical rule against medical marijuana in their units. At the same time, landlords must take into account the rights of other tenants and neighbors to live in a smoke-free environment. Adding to the complexity is the fact that there is no single source for information that can help landlords decide what to do.

Why is it so complicated? For starters, while many states are legalizing marijuana use, it remains an illegal, Schedule I drug under U.S. federal law; in the same category as heroin and LSD. And yet, the federal government has stated that it will not enforce marijuana law with medical marijuana patients who live in states where medical marijuana use is legal. Furthermore, federal officials may loosen restrictions as early as this year.

The only area in which federal laws on marijuana directly impact rental housing is when a landlord receives Housing and Urban Development (HUD) subsidies. A 2011 memo from the federal government made it clear: Tenants in HUD housing may not use marijuana. Okay, that settles it for the 10 percent or so of U.S. rental units that are registered with HUD programs. What about the other 41 million or so other rental units spread across the country?

The answer lies with your individual state law and it is the landlord’s job to know what the law is. “Governing” magazine offers a map on the status of marijuana laws in each state. It and other sites follow changing laws and post regular updates.

What do I tell my tenants?

Prevailing wisdom calls for a lease to clearly state expectations on marijuana use in the rental property – especially in states where recreational marijuana use is legal. Landlords should expect that all tenants may use marijuana. Adding a marijuana clause tells tenants what to expect and leaves little room for misunderstanding.

Although the answers on what is allowable are less than clear, we attempt to provide some guidance here. To simplify the process for considering what your guidelines will be on marijuana in your rentals, we tackle these issues separately: Recreational Use, Medical Use, and Growing Marijuana.

Recreational – Since recreational marijuana use is illegal throughout Canada as of this writing, and in all but four U.S. states, those landlords may prohibit recreational use. A tenant’s recreational marijuana use would be considered a crime and the landlord should treat it as such.

In Alaska, Colorado, Oregon and Washington, where recreational use is legally permitted, landlords may also ban the use of marijuana the same way that they may prohibit pets; but, as a report in Alaska Daily news notes, such bans could be a challenge for the landlord to enforce. For instance, how would a landlord know if a tenant baked marijuana into a pan of brownies? Also, keep in mind that in a state that has legalized recreational marijuana, a tenant’s use in a rental where it has been prohibited would be a lease violation, not an act that brings criminal charges. Your recourse, as the landlord, is to begin eviction proceedings. As with all evictions, a judge would decide if the eviction was warranted.

One area in which landlords do appear to be on solid ground in prohibiting marijuana in their rentals is with a ban on smoking, because of the effects of secondhand smoke. If the landlord permits recreational use but not via smoking, and a tenant is smoking marijuana in the unit, a smoking violation notice would be used.

Medical – You may forbid medical marijuana use by your tenants if your state bans it. You may also forbid it if your rental units are in the federal HUD program. Elsewhere, marijuana smoking may be forbidden even if your state allows it. That’s because secondhand smoke can negatively impact neighbors and the condition of your rental.

Beyond that, if your rental property is in a state that has legalized medical marijuana, you may opt to forbid or allow that use. By forbidding it, experts say, you are not risking much. A tenant with a disability who is medically approved for marijuana use could argue that you are discriminating against

the disabled, a federally protected class. But that argument relies on federal law, and all marijuana use is illegal under federal law. So far, courts have not clearly established the rights of medical marijuana users in rentals.

Before you opt to approve the medical use of marijuana in your unit, assuming that’s legal in your state, experts recommend that you first consult your attorney, who will be familiar with the most recent rulings on accommodating medical marijuana users.

Growing – States that legalized the growing of medical marijuana have enacted strict restrictions on who may grow it, where it may be grown, and how it may be distributed. The non-profit ProCon.org lists these guidelines as they develop. Patients in Connecticut, for instance, must obtain their medical marijuana from a state-approved dispensary, whereas individuals in Hawaii may grow up to seven marijuana plants for medical use. No landlord should be in the business of monitoring marijuana growing, so most experts are recommending that leases prohibit the growing of marijuana at the rental property until the courts develop more clear guidelines.

That applies to growing recreational marijuana. Although states differ once again – Colorado permits individuals to grow it at home but Washington does not – landlords may completely ban the growing of recreational marijuana until those states declare otherwise.

It is certainly unwise to permit a commercial marijuana growing operation within a residence. Plants need light and humidity that homes are not equipped to provide.

What does the future hold?

Federal legalization of medical marijuana has been proposed, and the Drug Enforcement Administration had been expected by June 30 to consider reclassifying marijuana as a Schedule II drug. If it was reclassified, it would be in the same category as morphine, codeine and oxycodone, still controlled and heavily regulated, but not illegal. As of this writing, however, the DEA has not announced a change.

If marijuana became a federally regulated drug, doctors would be permitted to prescribe it and patients would purchase it at a pharmacy. Landlords would not be in a position to know who was taking marijuana in the form of capsules, sprays, pills, patches or suppositories. It’s likely that rental leases would address only recreational use and growing marijuana.

If recreational marijuana becomes widely legal – and experts doubt that such a change is imminent – then landlords may omit the mention of marijuana in leases except to include it in a ban on smoking. The drug would only become an issue if its use led to complaints about loud parties, offensive odor or excessive noise.

Being a landlord requires a fair amount of stress. There are so many what-ifs. It could be tempting to dismiss the marijuana addendum as an unnecessary document, especially if your state has a complete ban. Still, the old adage, ‘Better safe than sorry,’ definitely applies here. When you hand the keys to your rental property to someone who will have legal possession for a year or more, there just shouldn’t be any guessing on the rules.

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