Cannabis legalization and landlords mitigation plan

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Cannabis legalization and landlords mitigation plan

Edison Reis
Rental Property Investor · Kelowna, British Columbia · Member since 2015 · 136 posts · 54 votes

As we all know Cannabis became legal in Canada few weeks ago and tenants are allowed to have a small grow up (up to 5 plants if I am not mistaken) 

How are you handling it to make sure things don’t get out of control without crossing the line? 

Cheers

Edison Reis

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Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
7y

I just ask my tenants to share.

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  • Ben Redden
    Kingston ontario · Member since 2018 · 9 posts · 4 votes
    7y

    Following!

    0Reply
  • Fayaz Gulamani
    London, ON · Member since 2018 · 2 posts · 0 votes
    7y
    @Edison Reis are you able to amend the existing lease agreement?
    0Reply
  • Kris Bucci
    Developer · Victoria, BC · Member since 2018 · 115 posts · 73 votes
    7y

    Just went to a meet-up with a Landlord BC rep and a BC Lawyer presenting and this was the main topic.  In BC, every previously ( before 17 Oct) signed rental agreement is grandfathered with a no cultivating (growing) canibas clause, and if you have a no smoking clause then this automatically includes canibas.  Moving forward every new agreement must specifically state the no cultivating and smoking of canibas in the agreement.  Hope this helps, and please speak to your own provincial authorities on this.  They highly recommending informing your existing tenants of this grandfather policy, as many won’t have a clue it exists.

    6Reply
  • Edison Reis
    OP
    Rental Property Investor · Kelowna, British Columbia · Member since 2015 · 136 posts · 54 votes
    7y

    Thanks @Kris Bucci ! 

    This is all uncharted waters for landlords and tenants that’s for sure. 

    In one of our Strata’s the council passed a new bylaw prohibiting cultivating due to insurance concerns. Our insurance company stated that fires related to cultivation of marijuana won’t be covered so .... that’s a real pickle as far as liabilities. 

    The other side of the coin is .....I don’t think a strata bylaw overrules Federal and Provincial laws that allow people to cultivate. 

    For me liability and  potential fire issues are the main concern. 

    Have you folks checked with your insurance company ? 

    Edison 

    0Reply
  • Kris Bucci
    Developer · Victoria, BC · Member since 2018 · 115 posts · 73 votes
    7y

    I haven’t checked with my insurance company, but if you can say no to pets, no to regular smoking then I don’t need see a reason why you can’t say no to pot... I’ve notified my current tenants and have updated my agreements to state the security deposit will be automatically forefeited if they are caught.  

    1Reply
  • Edison Reis
    OP
    Rental Property Investor · Kelowna, British Columbia · Member since 2015 · 136 posts · 54 votes
    7y

    I hear you @Kris Bucci but don’t shoot the messenger as I am playing the devils advocate. (And the devil smokes crazy things) 

    I believe the difference is the fact there’s no Federal nor Provincial law in place to “provide people the right” to have a pet or nor smoke inside a residence but ..... they just gave them the right to cultivate it. 

    I agree, we all should list in our contract .... can’t  cultivate or smoke, etc but if they are really inclined to do it we will be in a nasty legal ground. (Privacy law , Human Rights and Federal legislation) 

    Lawyers will make lots of money just around this matter ! 

    It really reinforces the need of doing a proper screening. If they look like “peace and love” folks .... stay away from them. 

    0Reply
  • Kris Bucci
    Developer · Victoria, BC · Member since 2018 · 115 posts · 73 votes
    7y

    Lol... @Edison Reis wasn’t shooting.. I see your point.  I guess we just keep watching and listening and hope someone else learns the lessons the hard way!!

    0Reply
  • Edison Reis
    OP
    Rental Property Investor · Kelowna, British Columbia · Member since 2015 · 136 posts · 54 votes
    7y

    I know was just teasing  you. 

    You got it brother ! Landlords needs to stick together and share experiences for the benefit of all.

    0Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    7y

    I just ask my tenants to share.

    [email protected]301-893-4635Podcast Guest on Show #192
    District Invest Group545 Reviews
    WebsiteView Page
    21Reply
  • Roy N.Pro Member
    Rental Property Investor · Fredericton, New Brunswick · Member since 2013 · 7k+ posts · 4k+ votes
    7y

    @Edison Reis

    Homeowners are allowed to cultivate up to 4-plant, what Tenants are allowed to do will depend, to some degree, on what amendments / interpretation of the Residential Tenancies Act in your province.

    We updated our leases over a year ago to add cannabis to our prohibition on cultivation of any crops (food, tobacco, cannabis or commercial) within buildings.  Outdoor cultivation on the property requires prior written consent.

    1Reply
  • Edison Reis
    OP
    Rental Property Investor · Kelowna, British Columbia · Member since 2015 · 136 posts · 54 votes
    7y

    Thanks for participating @Roy N. !

    Your support and feedback is always appreciated 

    Edison 

    0Reply
  • Jeremy Blevins
    Folsom, CA · Member since 2018 · 134 posts · 100 votes
    7y
    If your tenants aren’t smoking inside why stress about them growing a few plants? Especially if they are paying their rent on time.
    2Reply
  • David H.
    Madisonville, LA · Member since 2018 · 125 posts · 71 votes
    7y
    I dont care if they drink beer long as they dont dump it on the floor. Could care less if they grow herb long as they dont smoke in the house
    2Reply
  • Dave Passey
    Investor · Missoula, MT · Member since 2015 · 242 posts · 177 votes
    7y
    @Jeremy Blevins Why stress? For the reasons stated above. The insurance companies are not going to cover anything if there is an issue. Your tenant that pays rent on time causes a fire with their lights or something like that and the insurance company tells you that your are SOL. To me, that is reason to stress about it. I personally don’t care if people want to grow or smoke, but it goes on the list of things that I am not comfortable occurring in my rentals.
    0Reply
  • Reginald Willett
    Sioux Falls, SD · Member since 2016 · 11 posts · 1 vote
    7y
    @Dave Passey But still you can’t stress about the unknown. Calm down and if your rental is up in flames. Take ya Loss and rebuild the rental and add this is a smoke free unit. Just a thought
    0Reply
  • Earl Hatmaker
    Specialist · Dayton, OH · Member since 2018 · 59 posts · 41 votes
    7y
    @Edison Reis who is to say your tenant isn’t growing organic lettuce to feed their family? Growing pot indoors isn’t exactly easy and most people would rather go buy it than wait 4 months to get some half assed pot. Kinda like they are the tenant and rent from you, they’re the stoners and don’t grow their own pot. THEY ARENT THAT SMART! 4 plants is one light in a closet not your entire rental turned grow warehouse. Maybe take a puff and deal with it when it arises? Also like others said amend your lease if you are that concerned in the future. Dear Canada Are you accepting new residents?
    1Reply
  • Earl Hatmaker
    Specialist · Dayton, OH · Member since 2018 · 59 posts · 41 votes
    7y
    @Dave Passey would you tell your tenants they can’t grow in a tower garden? My daughters school has towers in the class room. They wouldn’t put a fire hazard in a 5 and 6 year olds class room where we live. According to your theory your tenants shouldn’t have a stove, hair or clothes dryer, or anything that could cause damage to your units it sounds like. Does everyone elss expect their tenants to wear bubble suits? I’d check with your insurance now that it’s legal. See if they have specific insurance now that covers this? I think the only way you’d be screwed is when this was illegal. Now it’s something everyone will have to deal with and figure out. Good job Canada!
    0Reply
  • Thomas S.
    Member since 2016 · 13k+ posts · 12k+ votes
    7y

    Unless you are a extremely naïve person having a tenant that smokes means that they and their friends are smoking inside your property. This is a given in any cold weather climate. If you do not want smoking in your unit you can not rent to anyone that smokes.

    The problem with grass comes into play when you have a multi unit building. It is absolutely mandatory that as a responsible landlord you have a zero tolerance no smoking policy. Put this in your lease, stress the policy and if during your quarterly inspections you fine pot plants you know you have smoking in your property. Time to get rid of that tenant or get rid of the policy.

    Landlords that believe as long as a tenant is paying rent why bother with them clearly do not care about their tenants. Of course if it is a SFH why care unless you do not want the property contaminated with smoke. The biggest concern with a SFH is that the tenant will be growing far more than the allowed 4 plants and mold will be a concern. Do your quarterly inspections now more so than ever.

     No smoking/no plants is a must have lease policy now in Canada.

    1Reply
  • Edison Reis
    OP
    Rental Property Investor · Kelowna, British Columbia · Member since 2015 · 136 posts · 54 votes
    7y

    We would welcome you @Earl Hatmaker ! 

    Just hurry up before the Northern wall gets built ! Lol 

    0Reply
  • Dave Passey
    Investor · Missoula, MT · Member since 2015 · 242 posts · 177 votes
    7y

    @Earl Hatmaker

    I think you are missing the point of what the OP said. He mentioned that his insurance didn't cover it if there was an issue with them. That is totally different than a stove, hair or clothes dryer. Totally different than having a tower garden. No one is asking for bubble suits at all. With the changed laws, if their insurance will cover it, then it is a different story, but that was not the premise. 

    I don't want to allow things that the insurance won't cover because I guess I am not as lackadaisical as @Reginald Willett and would have a tough time if my rental is up in flames and I don't have money from the insurance to rebuild it.  I guess some people have money available to just build a new house. Maybe one day I will be as wealthy as y'all. 

    1Reply
  • Reginald Willett
    Sioux Falls, SD · Member since 2016 · 11 posts · 1 vote
    7y
    @Dave Passey that’s why we are here Dave to make the big bucks! If you want to worry about Security go back to a Job. (Just over Broke) here we are the lord of our land!! Go out and Win the day!!!!
    0Reply
  • Kris Bucci
    Developer · Victoria, BC · Member since 2018 · 115 posts · 73 votes
    7y

    Simple to me:  If they grow it inside, they will smoke it inside.  If they smoke enough of it inside the home will still smell when they leave, which will cost time/money on the turnover.  So my agreements moving forward will say no.  As I mentioned in a previous comment, all previous agreements in B.C. are grandfathered as not allowing the growing of pot indoors, so I just needed to educate the tenants on that fact.

    If the insurance won't cover, that just ads further justification for me.  But in the end, in my mind I have enough of a reason to say no.  Especially as the places I rent are going for between $1500-$2600 for 2-3 bedroom units and the properties are worth well over 500K each.  So I will keep doing my best to ensure I have tenants that will take care of the units...  so far I have been lucky in that regard... or maybe just been good at screening.  :)

    1Reply
  • Jami Kloet
    Investor · Sarnia, Ontario · Member since 2017 · 44 posts · 43 votes
    7y

    To throw another wrench into the situation, I read something the other day that said for the time being CMHC rules remain the same and lenders plan to treat any pot plant growing as a grow-up. For now, the legalization has no effect on these rules and any house with pot plants will still be a latent defect and will require a remediation report and electrical inspection.

    I’m sure this will eventually change, but that can only happen if real estate counsel changes their current property disclosure rules.

    I haven’t done my own due diligence to look deeper into this, and verify for myself (so maybe somebody else can shed some light?), but this is something to consider for anybody planning on selling in the near future.

    1Reply
  • Lee Bell
    Real Estate Appraiser · Isabella lake, CA · Member since 2018 · 628 posts · 491 votes
    7y

    It's funny to see the level of hysteria about a plant.

    How many of you have house plants?

    LOL.

    1Reply
  • Matt K.
    Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes
    7y

    Wouldn't the landlords insurance pay for the repair and then sue the tenant for the grow? I mean are we talking a light plugged into a normal outlet or we talking a garage w/ stolen power and stripped extension cords that dims the neighborhood? 

    1Reply
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