On behalf of Michael Brooks of Law Offices of Michael A. Brooks posted in commercial real estate on Thursday, March 15, 2018.
With the growing legal acceptance of marijuana on a state-by-state basis, there’s a lot of confusion about how the owners of multi-unit rentals need to address the issue.
Here are some of the most commonly asked questions about rental properties and marijuana in states like California:
1. Can you bar tenants from smoking marijuana in your rental units?
Yes. In fact, if your lease already bans smoking, you don’t need to add anything.
2. If a lease bans illegal drug use, is marijuana covered?
No. In order to avoid a legal issue, you need to amend the lease to state that drugs that are illegal under federal law are prohibited. Marijuana is still considered illegal under federal law.
3. What should you do about medical marijuana?
This is a complicated question that doesn’t have an easy answer. If you ban smoking, you can still allow edibles, oils and other forms of medical marijuana.
On the other hand, if you ban illegal drug use and the manufacturing or cultivation of drugs on the property, medical marijuana can still be an issue. State laws and the laws in your municipality can also conflict. It might be wise to seek the advice of an attorney who handles real estate and landlord-tenant issues.
4. Do you have to allow tenants to cultivate marijuana if you do allow smoking or marijuana use?
No. You can restrict grow operations, even though it is legal for some people in California to have six adult plants or 12 immature ones. They take up a tremendous amount of electricity and water, which can cause your expenses to skyrocket. The humidity required for proper growth can also cause problems with mold. That can damage your units and lower the value of your property. Insurance is unlikely to cover any damage done as a result of growing the plants because growing them is still illegal under federal law.
It’s difficult to keep up on the changing nature of the laws regarding marijuana — but it’s necessary if you want to keep your real estate investments profitable and in good shape.