Handling Marijuana Use On Your Rental Property

Real Estate Articles

Approximately 23 states have laws legalizing recreational or medical marijuana use, and it seems that many more will be following in their footsteps. However, marijuana is still considered an illegal drug by the federal government. This has left many property owners struggling to stay on the right side of the law while still respecting tenants' rights. Here are a few tips for developing policies that helps you keep pace with this ever-changing social situation.

The Dangers of Allowing Consumption on Property

One of the fears many people had (and still have) about legalizing marijuana is that doing so will cause an increase in crime. After all, approximately 32 percent of people in prison were arrested because they possessed or were under the influence of drugs. About 30,000 people are arrested each year by the Drug Enforcement Agency for drug trafficking.

Recent studies, however, have proven the opposite to be true. Colorado, one of the first states to legalize marijuana, has seen a 6.9 percent decline in violent crime and an 11.1 percent drop in property crime in the first part of 2014. Researchers at University of Texas Dallas studying crime rates between 1996 and 2006 in each state also found—all things considered—there was support crime decreased in the states that legalized marijuana.

That doesn't mean, though, that you should roll out the 420 welcome mat to renters who use marijuana. As noted previously, marijuana use and possession is still considered a federal crime, and allowing it on your property could open the door to serious legal consequences for you.

For instance, some states allow people to grow marijuana plants for personal use. If they exceed the legal limit or begin selling the drug out of your rental property, they could face criminal charges and your property could be seized due to civil forfeiture laws that allow law enforcement officials to take assets from people involved in crimes. Even though you may be able to prove you weren't in cahoots with your renters, it may take a lot of legal wrangling to get your property back.

Additional problems you could run into include decreased property values and damage to your home caused by modifications made by the tenant to grow the plant.

Disallowing the Use of Marijuana on Property

You are within your rights to disallow the use of marijuana on your property. Many property owners are hesitant to set this rule in place for fear of running afoul of the American Disabilities Act (ADA) that requires landlords to make reasonable accommodations to disabled tenants. The ADA, however, is a federal law. As such, medical marijuana use would not be protected since use of the drug is considered illegal by the federal government.

If you choose to ban the smoking or growing of marijuana on your property, then you'll need to make that clear to tenants up front. You should notify potential renters at the time they inquire about and/or submit an application for the property. There should also be language in your rental agreement detailing the consequences of breaking this rule (e.g. immediate eviction).

On the other hand, if you do choose to allow marijuana use on your property, then you need to set the ground rules. The lease should address issues such as:

  • Where the tenants can smoke marijuana (in many states, it's illegal to smoke it outside)
  • Whether or not they can grow the plants on property
  • If they are allowed to make changes to the property to accommodate marijuana farms
  • Whose responsible for cleaning up any mold that forms due to growing marijuana plants
  • Grounds for eviction (e.g. caught selling marijuana out of the facility)
  • Legal remedies for the possibility that your home may be seized because of drug trafficking

It's critical that you read more and connect with your property management company to discuss these issues and for more tips for dealing with tenants who use drugs.

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19 January 2015

Sarah's Renting Tips

Although I've never worked professionally in the real estate business, I sure know my way around it. How, do you ask? Well, I have simply rented a lot of different places and worked with a lot of different landlords and real estate agents. In the past 7 years I've lived in 11 different houses or apartments, none of them my own. In finding those 11, I have looked at literally hundreds of apartments. I used to hate house hunting, but now it's kind of fun. You just need to know what you want and the right questions to ask. Hopefully this blog can help you learn some of the tricks of the trade from another renter like yourself.