11/24/2014

Landlords and Property Owners, Don't Risk Your Property With Illegal Activity

In spite of the laws being passed in many states allowing legal consumption of marijuana, federal law says it's illegal. So in spite of the growing public "approval" towards this drug, if you are a landlord with tenants, you may be at risk if you are allowing tenants to smoke marijuana on your property.

A landlord may be at risk, according to National Association of Realtors Senior Policy Representative Megan Booth, of having his/her property taken because the federal government, which takes precedence over state laws, may seize finances and property connected to illegal activity.  So while public opinion shifts more towards acceptance and pro-legalization, the federal government is also being pressured to act in accordance with the current federal laws. “The U.S. has signed on to global treaties classifying marijuana as one of the heaviest controlled substances,” Booth said. “So there’s some outrage that the U.S. isn’t prosecuting marijuana users here as fiercely.”

At the very least, new disclosures may be required (as if there aren't enough already) in leases and real estate sales transactions, covering marijuana policies on rented premises, and selling houses and condos where nearby marijuana use is allowed.   All is not rosy in this new "industry": there has been an increase in reports of explosions on properties where tenants have been growing pot using special equipment, mold could  be an issue because the plants require high humidity, to say nothing of smoke and odors from nearby users. Such issues could exponentially deadly if this involves apartments or attached multi-unit condominium buildings where an explosion could immediately cause damage across several units, or moisture and water leakage issues spread to a lower unit causing expensive mold removal and interior replacements, and subsequent legal issues for the owners, possibly the Board of Directors, and substantial insurance and replacement costs.  (Such a story was once told to me about non-English speaking tenants who rented a unit advertised as "garden apartment" in Orange County.  Being new to the U.S., and possessing very little English, this was interpreted to mean that a tenant could start their own garden inside the unit.  So a crop of marijuana plants was ultimately found growing over the carpeting and causing extensive water damage to the unit below.)






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