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How Do Florida’s Pot Laws Affect Leases?

January 5, 2018

Clarity for Fort Lauderdale & Hollywood Landlords and Tenants

Florida recently became one of more than 20 states to approve its own local medical marijuana program. With the new medical marijuana law coming into effect this year, landlords may be wondering how medical marijuana will affect their interactions with tenants. In this blog, David S. Tupler, a lease lawyer in Fort Lauderdale, addresses some of the most commonly raised questions and concerns raised by his Broward-based clients.

Can tenants grow marijuana for medical use?

Some states permit medical marijuana patients to grow plants for medical use at home. Florida’s statute does not permit program participants to grow their own cannabis. Nevertheless, even in states in which people are permitted to grow medical cannabis at home, landlords may prohibit tenants from growing marijuana plants on their rental property by including specific term in the rental agreement. If a property owner has not included a clause in the lease prohibiting marijuana growth on the property and later decides to take issue with the activity, he or she may still bar the tenant from growing marijuana by utilizing an anti-drug or anti-crime policy if he or she specified such a policy in the lease. A landlord who wishes to leverage an anti-drug or crime policy to prohibit a tenant from growing marijuana onsite would be required to first notify the tenant in writing of the lease breach and name the specific violation of the lease terms. If the tenant continues to grow marijuana on the rental property after receiving notification of the lease violation, the landlord may then attempt to evict the tenant. Landlords who do not specify in the rental agreement that tenants are prohibited from legally growing marijuana on the premises may have a much more difficult time prohibiting the activity on their rental properties.

Prohibiting tenants from smoking pot onsite

Some tenants may argue that because Florida now has a medical marijuana program, a landlord may not prohibit tenants from smoking medical marijuana. Despite the passage of the new law in Florida, residential landlords may still prohibit tenants from smoking marijuana on their rental property in the same way in which landlords may prohibit cigar or cigarette smoking. Furthermore, smoking may negatively impact neighbors or other tenants. Therefore, it is within a landlord’s general interest to reduce health hazards and annoyances, including marijuana smoke, that may affect those who reside near the property. Similarly, it is also within the landlord’s interest to reduce the potential risks smoking poses to the rental property itself. To minimize the potential for unnecessary conflict with tenants, landlords should include a specific anti-smoking clause in the rental agreement prior to allowing the tenant to review and sign the lease. In the absence of an anti-smoking clause, landlords may still attempt to evict tenants who disturb others by smoking marijuana. However, in the absence of a specific clause, the process will likely require the landlord to first notify the tenant of complaints regarding the tenant’s smoking then document all future instances of smoking if the tenant refuses to comply with requests to cease.

Commercial landlord lease protections

Some commercial landlords wish to lease property to marijuana-related businesses due to the premium rents these businesses are more inclined to pay. Commercial landlords must remember that although marijuana use may have been approved in some states, marijuana use, sale, plant growth, and distribution all remain illegal under federal law. Therefore, the landlords who knowingly lease property to marijuana businesses are technically aiding illegal enterprises. Moreover, the federal government may opt to enforce federal marijuana laws at any time in any manner set forth in the existing federal statutes. Landlords should also note the common lease protections that may safeguard property owners when renting to other tenants may not offer sufficient coverage when renting property to marijuana-related businesses. However, there are certain protections Florida and Hollywood landlords may wish to consider including in their rental agreements if they wish to lease property to a marijuana business.

Prescription sale in Broward County

Commercial property owners who wish to lease property to a lawful cannabis business in Broward County should include in the rental agreement a very specific use clause that lists marijuana-related activities in which the tenant is permitted to engage on the property. Examples may include details regarding forms in which the business may sell cannabis, number of plants the tenant may cultivate on the property, plant processing details, and methods of storage and transport.

Covenant to comply with all laws

Because marijuana is illegal under federal law, landlords who rent to marijuana businesses should modify boilerplate language that states the tenant must comply with all laws. Modified language may require the tenant to comply with all applicable state and local laws, including medical marijuana program licensing and rules, in addition to Fort Lauderdale zoning ordinances. The rental agreement may call for the tenant to comply with all federal laws to the extent the laws do not interfere with the tenant’s right to use the rental property to run a marijuana business. Landlords should not modify or remove remaining boilerplate language that requires the tenant to comply with all federal laws that are not directly related to the growth, storage, or sale of marijuana.

Early termination clause

Leasing a rental property to a marijuana business may expose landlords to potential risks that are not typical of other tenants. Landlords who lease to marijuana businesses my face criminal prosecution, nuisance claims, property seizure, bank foreclosure, or actions by the property’s co-owners because marijuana is illegal under federal law. Therefore, a landlord may wish to include an early termination clause that specifically enumerates events that may trigger the landlord’s right to immediately terminate the rental agreement.

Property insurance in Hollywood & Ft. Lauderdale

Property insurance policies that cover real estate typically compensate property owners for damage that is caused by illegal activity. However, policies may differ in states in which marijuana use is legally permitted in some capacity. Therefore, it is imperative that property owners ask their insurance company whether damage caused by marijuana-related activity will be covered by their current policy or if coverage would be declined altogether due to federal marijuana policy.

These new laws are complex, and each case is unique. If you’re a lessor or lessee in Broward County and have questions, consult with a Fort Lauderdale lease dispute attorney to see how these laws apply to your specific situation.

This blog will be updated as related developments occur. If you have any questions in the interim, call David S. Tupler, P.A.