Landlords and Marijuana

On November 6, 2012, Colorado became one of the first states in the union to permit recreational use of marijuana. While the full ramifications of this amendment’s impact are still being sorted out, the impact on landlord tenant relationships in Colorado is clear.

The reality is very little has changed for landlords with regard to how the Amendment impacts a landlord’s ability to govern activity on his or her property. But a landlord should carefully review his or her rental criteria, lease documents, and rental/lease policies to make sure they are crystal clear on issues relating to marijuana use, possession, and cultivation. It is wise to have your documents reviewed by a knowledgeable Colorado real estate attorney to ensure that your policies are legal and enforceable.

Amendment 64

Amendment 64 specifically authorizes:

  1. Colorado residents to legally grow up to six marijuana plants as long as three or fewer of these plants are mature at any given time;
  2. Coloradans who grow marijuana are allowed to possess the marijuana they’ve produced on the premises where it was grown;
  3. All marijuana must be grown in an enclosed location and it cannot be grown publically or sold to the public;
  4. Property owners may prohibit or otherwise regulate the possession, consumption, use, and growth of marijuana on their property.

Amendment 64 doesn’t change the state’s medical marijuana laws.

Despite passage of Amendment 64 in Colorado, the fact remains that the cultivation or possession of marijuana is still illegal under federal law, and marijuana is considered a Class 1 Controlled Substance. However, the reality is that the federal government and has recently announced that it will not aggressively enforce federal marijuana laws in states like Colorado that have legalized pot. However, should a leased property be used as a commercial grow house the property remains at risk of being seized by the government.

Structuring a Lease to Deal With Marijuana

If a landlord or property manager wishes to prohibit marijuana use in his or her rental properties he or she should incorporate a crime and drug-free lease clause into his or her lease agreement. Under Colorado law a landlord may evict a tenant for failing to abide by the drug policy contained in the lease agreement. However, it bears mentioning that some judges in Colorado are reluctant to force removal of a tenant on the basis of marijuana use if he or she has not had an opportunity to cure – or stop their offending behavior. Furthermore, if acceptance of marijuana use continues to grow in the state, (55% of voters voted in favor of Amendment 64), it is likely that a landlord’s anti-marijuana policy may eventually become unenforceable unless the marijuana is causing damage to the property.

Another thing to consider is that police are no longer arresting citizens for the use or possession of marijuana. Therefore, landlords have lost some of the leverage they once had by threatening their tenants with calling the police if they are found in possession or using marijuana.

Even if a landlord decides to allow marijuana use on his or her property, the landlord can still refuse to allow tenants to grow pot on the property. There are many valid reasons for making this distinction since the hydroponics often used in the growth process can produce mold and also the growing operation consumes vast amounts of electricity. This is a big issue where the landlord pays the electric bill! The process to kill the toxic mold is expensive and likely a cost that a tenant will attempt to force onto the landlord. Additionally, there have been many cases where tenants have cut holes in the walls of rental homes to facilitate the ventilation of their grow operation and others who have rerouted the HVAC system to provide this ventilation. Lastly, the electrical system of many older homes simply cannot handle the power required by a grow house this may cause a fire hazard or a tenant may attempt to “improve” the electrical system through self-help.

A written provision in a lease prohibiting criminal activity in or on the leased premises will suffice to make marijuana possession a lease violation and can form a basis for eviction. Additionally a non-smoking provision will prohibit the smoking of marijuana on the leased premises and marijuana smoke and odor from emanating from a unit. More broadly a clause in a lease prohibiting a tenant from disturbing, harassing, annoying neighbors or creating a nuisance may be sufficient to evict a marijuana using tenant. Also, a provision prohibiting hydroponic cultivation or any cultivation of marijuana plants makes growing marijuana plants a lease violation and thus allows a landlord to evict for such a violation.

Lastly, a landlord may incorporate into his lease an addendum which sets a very strict policy and grants the landlord the remedy of serving an immediate Notice to Quit for Substantial Violation. With this agreement a tenant has no right to bring themselves into compliance or “cure” the default giving the landlord the right to evict the tenant for even a single violation. Or, a landlord may incorporate a less restrictive addendum and treat marijuana use, possession, or cultivation as a lease violation. Under this type of addendum a tenant has a right to bring themselves into compliance with the policy and “cure” the violation without being evicted. However, if he or she violates the agreement a second time then the tenant would no longer have a right to cure and must return possession of the property to the landlord.

Establish Your Policy

Landlords have a lot of flexibility in structuring a marijuana policy. Based on federal laws, a landlord may prohibit all marijuana use on his or her property. The landlord may prohibit recreational pot use, citing federal laws, but allow medical marijuana use on a case-by-case basis. The landlord may allow use of marijuana but not the growth of marijuana on the leased property citing health hazards and physical limitations of the property. Or he may open the floodgates and permit both the use and the growth of marijuana on the leased property.

There is no requirement that a landlord have the same policies for both recreational and medical marijuana use. However, if a property owner accepts federal subsidies and permits the use of marijuana, he or she could be in danger of losing those subsidies because marijuana remains illegal under federal law.

Contact a Knowledgeable Colorado Real Estate Attorney

If you have questions about your rights as a landlord or as a tenant regarding marijuana and how its use or cultivation may be restricted by a residential lease schedule your free consultation today. Call Robinson and Henry at 303-688-0944 or schedule your appointment online today at www.RobinsonandHenry.com.