Should You Allow Your Tenants to Use Marijuana in Your Rental Property?

Since California has now legalized the use of recreational marijuana, many landlords and property managers are now looking at whether they should permit the use of marijuana at their rental properties. The number of states that have legalized or are in the process of legalizing the use of recreational marijuana as the attitude nationwide towards it is rapidly changing. Yet, you have to remember that currently the sale and use of marijuana is still prohibited by federal law.

The Situation Gets Hazy

No pun intended, but with the number of states, including California, legalizing either medical or recreational pot or both, on the rise, many landlords continue to be confused regarding letting their tenants consume in their homes. While you might think allowing your tenants to use pot is not likely to have any serious consequences, here are five points you need to consider as you start to put together your own policy regarding the consumption of marijuana within your rental properties.

Do you have a mortgage on your property? – If you do, you better take a good look at the mortgage papers you signed. Many contain very specific language covering compliance with all local, state, and federal laws. While California might be in the process of legalizing marijuana, it still on the list of drugs banned by the federal government. Allowing the use of marijuana on your property could be a violation of the terms of your mortgage.

You are not the only one at risk – While you are the property owner and are responsible for your property and what goes on there, you may not be the only one who could become liable for any breaches in state or federal laws. Your property manager, homeowners’ association, and any other agents who are acting on your behalf could also be held liable. With this in mind, anyone who has a stake in the property should be consulted before you make your final decision.

Do you accept any public subsidies? – If you are currently accepting any form of government subsidy such as Section 8 vouchers or tax credits for renovations, you may have a problem. These programs typically require you to be in full compliance with all state and federal laws, including the use of marijuana. Allowing the use of marijuana can be seen as civil or criminal fraud resulting in fines and or jail time.

Will your insurance cover damages caused by marijuana usage? – Take a good hard look at your current insurance policy. You may find that your insurance policy will not cover any damages resulting from a tenant’s permitted use of marijuana because it still an illegal substance according to the federal government.

Are you willing to cover cleanup costs? – Marijuana, like cigarettes, leaves behind smoke ingrained in walls, carpets, ceilings, and any other permeable surface. All of which must be cleaned professionally when the tenant moves out. Having a professional service do this for you can be very expensive. Yet, if you don’t, you may have a problem finding new tenants.

As you can see, there is far more to deciding whether you should allow your residents to use marijuana in your properties than you might think. Take your time, consult your attorney, and then make sure that whatever rules you decide to put in place, be sure you apply them unilaterally to all of your rental properties and tenants.