With legalization of marijuana hitting in a number of states, landlords are faced with difficulties as to whether or not they should allow their tenants to use marijuana in their rental properties. Is it illegal for landlords to prohibit marijuana consumption on the rental property?
Marijuana is Illegal on a Federal Level
One thing to know for landlords is marijuana is still illegal on a Federal level. Landlords do have to consider this as it can allow them to prevent the use of marijuana in the rental unit. If the lease has a provision prohibiting illegal activity on the property, you can use this as the reason why marijuana is not allowed, even if it is allowed in California on the state level.
A properly drafted lease is the most important element you need in order to enforce rules at your rental unit. However, some tenants can still use edibles without their landlords knowing. While this might be frustrating, it is not always possible to crack down on this area. However, you can prohibit the use of marijuana smoking on your rental property. It is important to put a smoking ban in place right away in order to reduce the risk of marijuana smoking on the premises.
Banks and Loan Requirements
When you are deciding whether or not you should allow marijuana to be used on your property, it is important to know that banks do have certain requirements that need to be met to obtain a mortgage. Loan documents may have a clause that requires you to comply with state and federal laws. What this means is, you could be in breach of loan documents if you do choose to allow marijuana on the property.
Insurance Issues and Marijuana Use
In addition to running into legal issues with the bank, property owners need to find out what type of requirements need to be met to maintain insurance. If a tenant uses marijuana and some type of accident happens and you try to file a claim with the insurance company, they may deny your claim based on the marijuana use.
When tenants are allowed to smoke in the rental unit, it can cost landlords more money to maintain the unit. When you have to spend more to clean and maintain the unit, it cuts into your overall profit margin, and it can make it harder to find new tenants as they can withdrawal their application due to the left-over smell from smoke.
People that have been affected by second-hand smoke could end up developing lung conditions and other health problems. The tenants with health problems causes by the nuisance of a smoking tenant could actually file a claim with your insurance company to pay for those cuts due to negligence on your part.
Strict Language in Lease Agreements
Since more and more people are starting to become lenient in the way marijuana use is viewed, it is important to clearly define what is and what is not allowed. Landlord/Tenant laws are difficult to understand at times, which is why many people work a property management company. If you do plan to prohibit marijuana use on your property, you must make sure you notify your tenants, and you cite the lease agreement that they signed.
Keyrenter Property Management East Bay, CA provides clear language in our lease agreements to protect Tenant/Landlord rights. Keyrenter provides residential property management services to landlords of single family homes, duplexes, condos, and small multifamily units. We are not large apartment managers. Our purpose is to help landlords maximize the return on their investment property while eliminating the stressors associated with being a landlord (including bad tenants and maintenance issues). Services we offer include: property analysis, setting rent, tenant placement, leasing services, maintenance coordination, tenant relations, property inspections, rent collection. We offer superior customer service. Because we know how to find quality tenants that can meet the terms of their lease agreement, using Keyrenter’s 14-point tenant screening process, our eviction rate is below 1%.