Peace Out Man

Attention Landlords, Condo Associations and Realtors How Will The Legalization of Marijuana Impact Your Real Estate Business?

By Linda O'Koniewski, CEO and Owner, RE/MAX Leading Edge

As of December 15, recreational marijuana is legal in Massachusetts.  So, what is recreational marijuana's effect on real estate?

Here’s the skinny.  Individuals over 21 will be allowed to have 10 oz of pot in their home and grow up to 6 plants legally.

Does an agent listing a home with marijuana plants and growing equipment need to disclose that to the buyer?

Can landlords ban smoking of marijuana in their properties?

What should landlords do to ensure they can protect their property against the residue and pungent smell that is created in homes where pot is smoked?

Can someone with a permit to use medical marijuana smoke in their rental unit if the landlord does not allow smoking of marijuana in the building?  Must the landlord accommodate the medical need?

It’s important to remember that marijuana is still a Schedule 1 illegal substance under Federal law.  And to make the new law harder to interpret, the new presidential administration and proposed cabinet have suggested they want to enforce the Federal laws.  Currently, federal law is not being enforced in states where pot has become legal.

Will banks that are under strict Federal regulation be willing to lend on property that has illegal activity?

Mike McDonough and Bill Mullen, attorneys for the Massachusetts Association of Realtors and the Greater Boston Association of Realtors, shared their wisdom and advice with a large gathering of brokers-owners.  What made the discussion fascinating is that they didn’t agree to the answers to these questions.

So I walked away thinking that there is a lot of over-reaction and fear on the part of some Realtors and that we need to approach this with old fashioned common sense.  After all, these issues aren’t as new as you think.Real Estate agents have been running into homeowners growing marijuana for years whether they knew it or not. Apparently, there are agents out there who don’t know a house plant from a marijuana plant.  (By the way, the leaves look exactly like all those bumper stickers and icons we’ve all seen for years.)

This is how we are going to advise our agents.

I do not believe the existence of marijuana plants or growing equipment needs to be disclosed.  I think it is super prudent to have a Seller move all marijuana related equipment and plants out when the home is for sale and when the bank appraiser arrives.

Landlords can ban the smoking of marijuana in their buildings, but landlords can only protect themselves if they are specific in the tenant's lease. (Smokers are not a protected class.) Landlords do not need to “reasonably accommodate” a tenant who has a permit for medical marijuana to smoke in their home.  First, the smoke and smell can adversely affect and disturb neighbors and there are reasonable alternatives to smoking marijuana for those with a medical need.  Think brownies or a vaporizer.

Lastly, I strongly suggest that condo associations everywhere consider revising their by-laws to reflect their feelings on the subject.  Although it’s been happening for years, recreational marijuana will be more prevalent as it is brought into the mainstream.  The pungent smoke and smell are controversial and found unpleasant by many people.  So condo associations should be proactive immediately.  I have had this discussion with our house counsel Bob Bell and Lou Izzi and they are prepared to advise landlords and condo associations on this subject.

Meanwhile… Peace-out man