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Renting to Pot

If done right, landlords can benefit from renting to marijuana growers

Next time you sign a lease for a rental house or apartment, you may notice a new section on the form: a medical marijuana agreement. Similar to a pet agreement that details the terms and conditions associated with allowing an animal, a medical marijuana agreement spells out the who, what and when of using or growing medical marijuana on a rental property — if the landlord allows it at all.

With the advent of recreational marijuana legalization on July 1 of this year, renters need to know the ins and outs of growing or consuming weed in rental properties. 

Until recently, landlords were legally required to accommodate medical marijuana users. “If somebody had a prescription for medical marijuana, then you had to treat that as a prescription for any other medication,” says Jim Straub, legislative director of the Oregon Rental Housing Association, president of Acorn Property Management in Springfield and president of the Rental Owners Association of Lane County. “You couldn’t discriminate against it.”

That all changed in 2010 with an Oregon Supreme Court case, Emerald Steel Fabricators, Inc. v. Bureau of Labor and Industries, which determined that an employer could legally fire an employee for smoking medical marijuana, even with a card. As with employers, this case allowed landlords to legally forbid medical marijuana users from smoking or growing marijuana in a rental property.

But, Straub says, this doesn’t mean all landlords are unwilling to rent to medical marijuana users. “There are a lot of benefits to having medical marijuana grows on your property,” he says. “We’re in the business to make money and to mitigate risk. This is an investment, and ethics aside, with Eugene being fairly liberal, it’s not something that a lot of landlords are necessarily opposed to as long as it’s not creating risk.”

The risks can be fairly severe, according to Straub — electrical fires, water damage, mold, oily stains and a pungent smell that won’t go away.

However, Straub says there are ways that landlords can mitigate the risks of allowing a marijuana grow. The Rental Owners Association of Lane County offers a checklist for landlords with tips for working with marijuana growers. For example, marijuana growers typically use more electricity than is normally available in a garage outlet, so rental properties often need modification to accommodate the wiring needed to grow marijuana plants. Generally, the tenants pay for the upgrades.

The landlord can ask tenants to agree to conditions like these in the rental agreement, committing to pay for all necessary modifications to the property. Typically, Straub says, “Participants wanting to engage in the activity are just delighted that someone is willing to allow it. As long as they can see everything spelled out on the form, they are tickled pink.”

Straub says that tenants who grow are more likely to stay long-term, and once a property is fitted for a marijuana grow, its value and desirability increases at no cost to the landlord. 

Of course, it’s not always perfect.

“I’ve had some horrendous damage done to my properties from marijuana grows, as well,” Straub says. “I’ve had some people that didn’t ask in advance, that didn’t run new electrical wires, pulled the breakers out of the wall, put in higher amp breakers and then melted the wires inside the walls.”

And for those living in Section 8 public housing, medical marijuana is not an option, because it still violates federal law. 

“We often get calls from people who feel they’re being discriminated against, people who are not well and want to use cannabis in Section 8 housing,” explains Amy Margolis, an attorney with Emerge Law Group in Portland, which specializes in marijuana law. “We have to tell them ‘No, you’re putting yourself in danger and you need to go somewhere else.’ I know that sounds like a really terrible response, but you cannot consume in Section 8 housing.”

Margolis says she isn’t sure if Oregon will see a larger demand for 420-friendly housing once July 1 rolls around. “Now that everyone can grow four plants in their home, just as a hobby grower, I wonder if we are going to see more pushback from landlords on that issue,” she says.

She adds that she’s mostly heard from growers interested in starting marijuana businesses in commercial properties, but that’s also an issue that’s up in the air. She speculates that recreational dispensaries won’t come online until fall 2016. Many of the laws regarding recreational marijuana grows for profit are yet to be determined by the Oregon Liquor Control Commission.

For Century 21 real estate broker Brittany Cowan and her clients, it’s a frustrating situation. “People contact me wanting to know if I know anything about the zoning laws, but of course nobody does yet,” she says. “I’m keeping my eyes and ears open so I can be ready and knowledgeable. A lot of people feel like they’re in limbo.”

Cowan says she advises prospective property buyers to wait for clearly defined laws before they purchase or rent a commercial property. “In a business sense, you don’t want to hold out, but I would hate for someone to spend their savings and hard-earned money on something they can’t use.”

For now, the best bet for medical marijuana users and growers who want to use a rental property to smoke or grow is to be open and honest about their intentions. 

“People run into problems when they rent a house and don’t tell their landlord what they’re doing,” Margolis says. “I think landlords hear a lot these days that people want to grow marijuana, and if they’re inclined to allow that, they’re probably going to pick the most professional and respectful candidate.”

Straub adds that he has a bone to pick with anyone who rents his property and completely changes it without permission, marijuana grower or not, but as long as everyone involved is forthright, renting to pot growers can turn out well for a landlord. 

“If they engage in an intelligent, meaningful conversation about what both sides are expected to do, it’s good business,” Straub says. “Where’s the downside to a landlord as long as it’s not damaging your investment?”