Window to the Law: Legal Marijuana and the Real Estate Professional

Window to the Law: Legal Marijuana and the Real Estate Professional

Marijuana is an illegal drug under federal
law, however, over the last 20 years, usage of medical marijuana has become legal in most
U.S. jurisdictions. In this edition of Window to the Law, we will
discuss how legalization of marijuana impacts real estate professionals and brokerages. I am Finley Maxson, NAR Senior Counsel. While marijuana remains illegal under federal
law, 30 states and the District of Columbia have passed laws providing for the legal use
of medical marijuana. Eight of these states also allow for the recreational
use of marijuana. Additional states are considering legislation
legalizing marijuana for recreation use or allowing for medical usage. Legal marijuana poses a challenge for real
estate professionals and brokerages in two instances: property management and employment
law. When a real estate professional serves as
a property manager, tenants may request an accommodation under the federal fair housing
act or state law to allow the tenant to smoke or grow marijuana on the premises. Property managers can prepare for requests
to smoke on premise by using a lease that bans all forms of smoking on the property. Instead of permitting the tenant to smoke
marijuana, the landlord could permit use of other forms of marijuana, such as lotions
or food products. A landlord could choose to prohibit tenants
from growing marijuana on premise by citing concerns about resident safety or potential
damage to the property. The presence of marijuana plants could encourage
criminal activity on the premises because of the plants’ value. Growing can also damage the property because
of the high humidity levels required by large growing operations. Also, the excessive levels of electricity
required to grow marijuana could pose a potential fire risk to the property. Since requests for accommodation are factual
determinations, every accommodation request should be considered separately. Therefore, different solutions may be needed
for different accommodation requests. Real estate professionals should work closely
with the property owner and the owner’s attorneys to determine the proper course of
action when addressing accommodation requests to use or grow marijuana. Note that federally-owned housing and property
covered by federal housing programs will not require an accommodation for new tenants,
but state laws may require the landlord or property manager to accommodate theses requests
on other properties. Because it is unclear how the conflict between
state and federal law should be resolved, real estate professionals should be careful
to work under the direction of the property owner and to receive all instructions in writing. The legalization of marijuana also raises
employment law issues such as use during work hours and use at the workplace. Because marijuana remains illegal under federal
law, federal law does not require an employer to make an accommodation
for marijuana usage by an employee. Most state laws carve out an exception that
allows employers to discipline employees for otherwise legal marijuana use on the premises
or intoxication [SLIDE #10]. However, some states do not allow employers
to discriminate against employees who may have a medical marijuana registration card. So, real estate brokerages should be familiar
with how their state laws address legal marijuana usage by their employees. Brokerages may also want to address legal
marijuana usage by independent contractor salespeople. While independent contractors are allowed
the freedom to conduct their business activities as they choose, a brokerage could include
guidelines in its independent contractor agreement on the salesperson’s usage of legal marijuana. Just like the brokerage encourages salespeople
to maintain a certain level of professionalism during their association with the brokerage,
the guidelines would set forth the firm’s expectations for its independent contractors. Of course, the brokerage needs to be careful
to not exercise too much control over its independent contractors to avoid having them
classified as employees. For more information, check out these resources. Thank you for joining us for this edition
of Window to the Law.

One thought on “Window to the Law: Legal Marijuana and the Real Estate Professional

  1. NEVER buy near a pot grow or allow one to destroy your home…For example: Anheuser-Busch heir parked a cannabis grow in our community. The lights poison our night sky and with them and the grow comes a 24/7 non-stop steady low frequency vibration inside our home almost a mile away. The smell bothers some, but the noise is a health risk that the for profit company refuses to address and attacks with lawyers and denials which we can not fight due to the huge money of the evil Busch, and the lack of ethics of the for profit company who does not care to remedy the issue and will gladly cause health issues along with the inability of the area homeowners to enjoy their own homes as long as they get their profit at our expense. Don't let the greed destroy your community and your property values as it surely has done to ours along with health, peace and sanity that goes with proper sleep. Boycott ABV Cannabis Co and any other so ethically challenged.

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