Landlord's Guide to Marijuana in Rentals

Transcript

Jonathan Forisha:

I’m Jonathan, this is Krista, and we’re here to help you be a better landowner. Today we are going to talk about marijuana and its place in your rental, or maybe not in your rental. So let’s start with medical marijuana. What is it and where is it allowed? Sure.

Krista Reuther:

Medical marijuana is basically a system in which someone needs to procure a medical marijuana license in order to buy the plant. So typically that means someone is going to their doctor, they are explaining whatever symptoms they have that they’re hoping could be alleviated by marijuana usage. The doctor then writes a note, they take that note to the people who administer the licenses, and they turn that in with an application, it gets approved or denied, and they can then purchase medical marijuana legally. This is allowed in 16 of the states where it’s only medical marijuana.

Jonathan Forisha:

Okay, and you say only because there’s also recreational marijuana. What is the difference there?

Krista Reuther:

Recreational marijuana is almost akin to alcohol usage, right? So anybody above a certain age in these states can partake. You go in, you show your ID, you shop the shop, and then you can go and use the marijuana as you’d like. Important to note, there are 18 states that allow both medical marijuana and recreational marijuana, so those two can go hand in hand.

Jonathan Forisha:

Are there any states that only allow recreational but not medical? No. Okay.

Krista Reuther:

Usually if they’re going to allow anything, they’re going to allow medical, and usually that’s first. Oftentimes what you see is medical marijuana will be passed through any of the legislation that it has to go through, and then later down the line they will fight for recreational marijuana to be legalized as well.

Jonathan Forisha:

Okay, and you’ve mentioned a few times the state laws that they’re legal at the state level, that’s the kind of confusing thing about where marijuana is today because it’s still illegal federally, right? It is.

Krista Reuther:

It’s considered a class one controlled substance, which means the government sees it as a pretty big deal, bad deal at a federal level. All of the states, however, are allowed to make their own legislative sessions and whatnot, browned marijuana for their specific area. There are some pushes for it to be changed at a federal level. That would definitely have an impact on landlords, but as of now, it’s not a ton to report there. It’s still a lot of conversations back and forth. Okay.

Jonathan Forisha:

And if it is legal in your state, how does that affect your rental property?

Krista Reuther:

So first what I would do as a landlord is look to see, is it just medical marijuana that’s allowed or is it both recreational and medical? Let’s tackle the easy one first. If it’s recreational, you are well within your rights to put in a policy in your lease to discuss what is and is not allowed regarding marijuana in your rental, right? You can also do that if medical marijuana is allowed in your state. You might see some cases where someone comes to you and says, hey, can I have an accommodation because I need it for X, Y, Z, and that’s a different conversation. Okay.

Jonathan Forisha:

And if you have a rule in your lease agreement that says no smoking, no smoking of cigarettes, does that also apply to smoking marijuana?

Krista Reuther:

So having a smoking clause in your lease does not automatically translate to marijuana usage. You could easily add language in there. Always make sure you’re talking to a lawyer. But you could easily add something in there to say, hey, no marijuana smoking in the rental, along with no cigarette smoking in the rental. Okay.

Jonathan Forisha:

Is that true even if it’s medical marijuana?

Krista Reuther:

Yes, you could put it in the lease. And I think if you’re concerned, you should. It’s a lot easier if you already have some kind of smoking clause in place to just add that language in versus having to have the whole conversation about adding a marijuana clause in. So that would be my recommendation.

Jonathan Forisha:

And what about other types of imbibing in marijuana? There’s obviously smoking, but there are many other things like vapes or edibles, etc. Yeah.

Krista Reuther:

I would say smoking is usually the concern I hear about most from other landlords, namely because that’s the easiest one to detect, right? There’s an odor. There’s also a real concern that it could increase the fire risk or otherwise damage the property because of that odor, maybe lingering in the walls on the paint, etc. Other things like edibles, tinctures, even vapes are not going to have the same impact for the property manager or the other tenants who might not be using. Okay.

Jonathan Forisha:

So say that you have a no smoking clause in your lease, but that somebody asks for an accommodation. So that they can smoke marijuana. How would you deal with that?

Krista Reuther:

First of all, I would take it as a win that my tenant felt comfortable enough to come and ask me about it versus just trying to do it and not get caught. I think that’s a testament to the positive landlord-tenant relationship.

And with that, I would want to try and hear them out. There are some rules like in Colorado, for example, that dictate what you can do on a multifamily property. However, if you’re somewhere that doesn’t have those laws or if you have a single family property, you could discuss allowing them to smoke outside, making sure that they’re cleaning up after themselves. You don’t want like, roach, blunts thrown on the ground or anything like that. You want to make sure that they’re somewhere that they can dispose of things just as you would for anyone. And you could explain that you don’t want them to smoke inside and here’s why and see if you can work with it that way.

If you are in a multifamily property or otherwise you don’t feel comfortable allowing them to smoke outside, you could discuss other solutions like allowing them to use edibles or other forms of marijuana so that it doesn’t impact their neighbors, the walls, etc. Yeah. That makes sense. Yeah. But I would highly recommend trying to find a solution.

Anytime anybody is asking you for an accommodation or a modification, best practice is to try and work with them and document what you’re doing along the way, right? That could look like anything. That could be a survey. If you have a multifamily property, you could ask everybody else like, what’s the general vibe?

What do they think about allowing smoking marijuana in a shared space outside? You could even just make sure you’re reaching out, doing your due diligence, researching different cases. But document what you’re doing, work with your tenant, don’t just deny them outright and turn a blind eye. You really want to reward them for coming to you and having this conversation.

Jonathan Forisha:

Yeah, because you never know what you could reach an agreement on. Yeah. Hopefully it works for both of you. So outside of smoking marijuana or edibles or imbibing marijuana in any way, a lot of the states that have legalized marijuana, including where we are, Colorado, also include being able to grow marijuana plants. How does that work with a rental? Can you stop somebody from growing marijuana?

Krista Reuther:

So short answer is yes. Of course, we’re going to lean on the lease in that case. If you want to learn more about what kind of language you should put in your lease to deal with marijuana, check out our other episode on marijuana. But specifically having some kind of language outline saying that you do not allow growing marijuana on your premise, that is a really good first step.

Even if it’s legal at the state level, federal law supersedes that. So there is not a great case for your tenant to make that they have to be allowed to grow on the property. In fact, there have been several court cases where the landlord has actually taken the tenant in for damages, where they say, hey, this growing operation incurred a lot of very costly damage and I need you to pay for it.

Jonathan Forisha:

What kind of damages would happen in a property when they’re growing marijuana?

Krista Reuther:

And what we see most commonly are things like water damage. You know, you’re growing plants, they need water, that could easily become a mold situation. There is also lighting to consider, right? So if you don’t have UV lights already in your rental, which spoiler alert, you don’t, most likely, then your tenant could feel inclined to go and get them and then try to install them themselves. There have been cases where people try and do that. They cut into some kind of paneling. They’re trying to rewire things themselves. That can easily become a fire hazard in a very bad situation. And then of course, when you’re growing marijuana, there is the smell component too, which is something to consider.

Jonathan Forisha:

Yeah. Okay. So you mentioned a court case that resulted in a pretty hefty fine. What did that look like? Sure.

Krista Reuther:

So it’s kind of an interesting situation. This tenant had been basically growing a little empire of weed. How many plants? This person, I believe, had five plants. I don’t know how many were flowering, but it became such an operation that there was a very pervasive smell. So originally, the landlord came to the tenant, tried to collect damages, was awarded damages in a case. The tenant then went to the appeals court and said, hey, like this shouldn’t, like I have a right based on the state law.

I can grow this here. The landlord brought in a realtor who said, hey, the smell is so pervasive from this growing operation that it is natively impacting the property value. The court ruled that the tenant had to pay $38,000 in damages to the landlord. So it can get really kind of murky, but in terms of growing laws, that’s where landlords can feel the most confident about saying, like, you know, I’m not allowing this. Make sure it’s written out in the lease. Have a conversation if someone’s really passionate about it. But you are well within your rights to say, no, there is significant risk to my property if this goes on.

Jonathan Forisha:

And even if a tenant does have a legitimate need for medical marijuana, at no point does a medical marijuana license say that they have to be able to grow weed, right? Correct. OK. Yeah.

Krista Reuther:

These are two very separate things that often get conflated as being the same issue, but it’s not.

Jonathan Forisha:

Yeah. And what was the name of that court case?

Krista Reuther:

State versus Co. C-O-E. OK. It’s fascinating stuff. There are a lot of different court cases that have shaken out, especially as weed becomes more popular. Yeah. 70% of Americans think it should be legitimized in the recent Gallup poll. So I expect landlords to see this pop up. And it’s good to know what your rights are so that you can move through these conversations.

Jonathan Forisha:

Yeah. And as you mentioned, it may happen federally that it is made fully legal, recreationally, but we’re not there yet. So in the meantime, how should people read up on their state laws to see what it’s like in their jurisdiction?

Krista Reuther:

I would absolutely advise going to your local government website. So you can Google, for example, I would Google Denver.gov marijuana laws. And that would pull up everything that my state has or my county has specified regarding marijuana usage here. As long as you include that.gov, you’ll find a government site that’s going to be your best case scenario in terms of getting the most up to date information. I would also recommend having a chat in your local landlord group, whether you’re in our better landlords Facebook group, or you’re part of a live face to face meetup group.

Other landlords are going to have similar opinions or at least be in the know and have things to say about this topic. So it’s a great way to stay up to date with what’s going on.

Jonathan Forisha:

Yeah. Great tips. All right. Well, thanks for talking about marijuana and rental properties. If you out there have any other thoughts or questions, drop them down below. Don’t forget to subscribe.