Attitudes toward marijuana use have shifted dramatically in recent years. Ten states and the District of Columbia have all passed legislation allowing for recreational marijuana use, and thirty-three states now permit the usage for medicinal purposes. Still, marijuana is considered an illegal substance under federal law.
This has created a hazy situation for landlords, property managers and homeowners’ associations trying to decide whether or not to allow marijuana use at their properties. Marijuana use seems benign enough to allow—but is it?
Here are six things to consider before creating a policy one way or another:
Is there a mortgage on the property?
This is important because most loan documents contain language that requires the borrower to comply at all times with both state and federal laws. Because marijuana is still banned by the federal government, allowing its use at the property could result in a breach of loan documents.
Have you accepted any public subsidies for your property?
This includes everything from tax credits used for building renovations to residents who pay with Section 8 vouchers. These programs typically require full compliance with state and federal laws, so the use of marijuana onsite could be considered civil or criminal fraud.
Who else could be at risk?
It is not just the property owner who could be held liable for breach of state or federal laws. Homeowners’ associations, property managers and other agents acting on behalf of the owner could also be held responsible. All stakeholders should be involved in the conversation before determining whether or not to allow marijuana use on site.
Does your insurance company cover damage caused by illegal activities?
Review your policy closely. For example, Colorado experienced a spike in apartment fires after it legalized recreational marijuana. Many of the fires were caused by tenants trying to condense marijuana into a concentrated form using butane. Your insurance company may not cover damages determined to be a result of illegal activity, even if allowed by local laws.
Are you willing to pay for any costs associated with smoke damage?
Units exposed to smoke –from marijuana, cigarettes or otherwise – cost more to recover and maintain. Over time, the smoke becomes embedded in the walls, carpets, etc. It can be quite an effort to remove evidence of smoke altogether. This impacts not only the existing residents but also future residents. Anyone who has asthma or other lung conditions may have difficulty breathing in a unit that has been exposed to smoke.
How will marijuana use affect other residents?
Unfortunately, both smoke and smells are things that cannot be contained in a single unit. Not only could this be a nuisance to other residents, but it may also impact their health. A growing body of evidence suggests that secondhand smoke quickly infiltrates nearby units, and secondhand smoke can be as harmful to others as the person smoking! Allowing marijuana use on the property may open landlords, property managers and homeowners’ association to complaints—or worse, lawsuits if someone claims secondhand smoke has caused adverse health conditions.
As always, you will want to examine local, state and federal laws carefully before determining whether or not to allow marijuana use at your property. Rules can vary drastically from place to place.
In Michigan, for instance, private property owners can refuse to rent to anyone who smokes or cultivates marijuana on the premises, as long as that has stipulated upfront in the lease agreement.
In Massachusetts, landlords cannot prohibit the utilization of marijuana edibles or other forms of non-smoke consumption.
Moreover, in Rhode Island, no landlord may refuse to lease or otherwise penalize someone for his or her status as a medical marijuana cardholder.
Once you adopt a policy, be sure it is enforced consistently. “I would advise a landlord that you need to enforce the rule uniformly,” says Michigan lawyer Matthew Paletz. “You cannot just pick and choose, because then you could face some discriminatory blowback.”
Laws regarding marijuana use and discrimination can be a lot for new landlords or homeowners’ associations to wrap their heads around, particularly as the regulatory environment continues to change. An experienced property manager will be well-versed in these regulations and can help keep you protected.