Medical-marijuana laws could cause issues for landlords

The growing number of states that are legalizing the use of marijuana is creating headaches for rental-property owners in many parts of the nation.

Q. I have owned and managed a small apartment building for several years, but now I have encountered a problem that I have never faced before.

Our state permits the use of medical marijuana, but I have a longstanding “no drugs and no smoking” policy in place. If I continue to enforce this policy, would I be breaking the law?

A. Few legal issues in the real estate industry are evolving as quickly — and are causing as much confusion — as the legalization of marijuana in a growing number of states.

Twenty-nine states and the District of Columbia have already approved the use of medical marijuana. Eight of those states and D.C. also currently allow, or will soon allow, recreational possession and use of the drug without a doctor’s prescription.

Legalization poses some particularly thorny issues for apartment owners and their rental-property managers. After all, it’s one thing for a person to use pot in a single-family home that he or she owns — but it’s quite another matter when smoke, whether from tobacco or nontobacco sources, can easily waft into a neighbor’s unit on the other side of an adjoining wall, or kids playing in a development’s common areas come in contact with the fumes.

At a seminar earlier this year, Megan Booth, a policy representative for the National Association of Realtors, said it’s illegal for a landlord in any of the 29 states that have legalized medical marijuana to deny a tenant the right to use pot on their properties — presuming, of course, that the tenant has the appropriate permit or similar paperwork for medical-marijuana use.

However, landlords generally do have the right to regulate how the marijuana can be consumed. For example, a lease in a nonsmoking building still may prohibit the tenant from “lighting up,” as long as the contract permits the use of cannabis oils, marijuana-laced edibles or other digestible forms.

Lease agreements should explicitly state the methods of medical-marijuana use that are allowed on the premises, Booth said.

Again, landlord-tenant laws involving the use of marijuana are changing fast. There are a lot of gray areas, and current laws not only vary from state to state but, in many cases, from one city to the next.

Rental-property investors and managers should contact their local apartment association for details about which laws govern their area. Find the nearest chapter by calling the National Apartment Association (833-866-9662) or by visiting www.naahq.org.

Tenants with questions about the new marijuana laws should contact their local rent board or similar agency.

REAL ESTATE TRIVIA Innovative Industrial Properties became the first publicly held real estate investment trust to specialize in buying, renovating and then leasing large buildings to medical-marijuana growers when its shares began trading last December. After a mellow rally, its stock has fallen from its 52-week high.

Q. I was surprised when I saw a report on one of the national news shows that Delaware had been hit by a big earthquake. I know that California seems to get them all the time, but Delaware? Was that its first one?

A. Earthquakes don’t hit the Atlantic seaboard very often, but the Nov. 30 quake in the self-proclaimed First State was far from its first. Delaware has been rattled by 59 temblors since 1871, according to the U.S. Geological Survey. Thankfully, the 4.1-magnitude quake — considered “moderate” by federal standards — didn’t kill anyone. No homes were destroyed, but local insurance agents say they are still getting phone calls from folks who had some household items damaged or destroyed.

Q. I have owned my home for about six years. I did not receive my monthly mortgage statement in November, so I forgot to pay it. Now the bank has sent me a letter stating that not only do I owe it the payment for last month, but that I also must include a separate check for $89 as a late fee.

If the bank doesn’t send me my monthly notice, am I still responsible for making a timely payment on the loan?

A. Yes. All mortgage contracts require that you make payments on a regular and timely basis, regardless of whether you get a written notice that the payment is due.

Most lenders don’t contractually obligate themselves to send out monthly payment-due notices, but they mail them anyway as a courtesy to their borrowers. Based on what your letter suggests, your lender has every right to consider your previous payment past due and can slap you with a late fee because you didn’t pay it on time.

You might be able to avoid the proposed $89 late fee by calling your lender’s customer-service department. Most financial institutions are willing to waive such penalties for borrowers who have otherwise good payment records. But if your record is spotty, don’t expect much sympathy from your lender.

ABOUT LIVING TRUSTS David Myers’ booklet “Straight Talk About Living Trusts” provides the information readers need to determine whether forming an inexpensive trust would be a good idea based on their individual circumstances.

For a copy, send $4 and a selfaddressed, stamped envelope to D. Myers/ Trust, P.O. Box 4405, Culver City, CA 90231-4405. Net proceeds this month will be donated to the American Red Cross.

Send questions to David Myers, P.O. Box 4405, Culver City, CA 90231-2960, and we’ll try to respond in a future column.