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Medical Marijuana in Rental Properties in Michigan

in Property Management - Various Topics

A lot of questions have arisen around the use and sale of medical marijuana in rental properties since the State of Michigan voters made using and selling medical marijuana legal. Do I have to allow my tenants to sell pot? Can a tenant grow dozens of plants in my unit without my permission? What if I have a non-smoking policy? And, many more.

Before trying to answer any questions regarding this topic, there should be an understanding that there aren’t any hard and fast rules or court cases that one can look to for help. There is more gray around this topic than a cloudy day.

First, let’s address the question of “do I have to let my tenants sell pot out of their units? “ First, just to clarify, under the law, anyone that wishes to grow and provide marijuana to patients is called a “registered medical marijuana caregiver.” Some cities have passed specific ordinances controlling who can be a caregiver and where and how they can provide the service. The City of Grand Rapids has passed specific ordinances controlling how this business can be operated. Other cities either do not have laws regarding the topic or they are pondering an ordinance to completely outlaw the activity—contrary to State law. You’ll need to check with your local government to discover the local laws and regulations.

The City of Grand Rapids uses the zoning code to provide parameters for caregiver operations. Under the code, caregivers are classified as a Class B Home Occupation. There are many rules around how a Class B can operate. A complete list of the restrictions/parameters can be found in Section 5.9.13 Home Occupations section of the Grand Rapids’ code. Some of the laws that a landlord may wish to be aware of are:

  • Class B home occupations must be licensed by the City.
  • “Walk in” trade is prohibited.
  • No signs are allowed.
  • Not more than one-fourth (¼) of the living area of the dwelling unit and less than one-half (½) of the living area of the main floor shall be devoted to the home occupation.
  • No part of an accessory structure, either attached or detached shall be used.
  • In no instance shall one or more home occupations in any single dwelling unit permanently occupy more than three hundred (300) square feet of the dwelling unit.
  • Home occupations shall not require exterior alterations or involve construction features not customary in dwellings, or require the use of mechanical or electrical equipment which shall create a nuisance to the adjacent neighborhood.
  • Any permanent structural alterations to the interior of the dwelling unit for purposes of conducting the home occupation which would render it unsuitable for residential use shall be prohibited.
  • The activity shall not require the creation of any additional parking spaces to service the home occupation.
  • Visits by customers, clients, students or patients to licensed Home Occupation – Class B location shall be limited to the hours of 7am to 8pm.
  • Nothing in the Code, or in any companion regulatory provision adopted in any other provision of the Code, is intended to grant, nor shall they be construed as granting, immunity from criminal prosecution for growing, sale, consumption, use, distribution, or possession of marihuana not in strict compliance with that Act and the General Rules.
  • Also, since Federal law is not affected by that Act or the General Rules, nothing in this Chapter, or in any companion regulatory provision adopted in any other provision of this Code, is intended to grant, nor shall they be construed as granting, immunity from criminal prosecution under Federal law.
  • The Michigan Medical Marihuana Act does not protect users, caregivers or the owners of properties on which the medical use of marihuana is occurring from Federal prosecution, or from having their property seized by Federal authorities under the Federal Controlled Substances Act.
  • The following requirements for a registered primary caregiver shall apply:
    1. The medical use of marihuana shall comply at all times and in all circumstances with the Michigan Medical Marihuana Act and the General Rules of the Michigan Department of Community Health, as they may be amended from time to time;
    2. A registered primary caregiver must be located outside of a one-thousand (1,000)-foot radius from any school, including child care or day care facility, to insure community compliance with Federal “Drug-Free School Zone” requirements;
    3. Not more than one (1) primary caregiver shall be permitted to service qualifying patients on a parcel;
    4. Not more than five (5) qualifying patients shall be assisted with the medical use of marihuana within any given calendar week;
    5. All medical marihuana shall be contained within the main building in an enclosed, locked facility inaccessible on all sides and equipped with locks or other security devices that permit access only by the registered primary caregiver or qualifying patient;
    6. All necessary building, electrical, plumbing and mechanical permits shall be obtained for any portion of the residential structure in which electrical wiring, lighting and/or watering devices that support the cultivation, growing or harvesting of marihuana are located;
    7. If a room with windows is utilized as a growing location, any lighting methods that exceed usual residential periods between the hours of 11pm to 7am shall employ shielding methods, without alteration to the exterior of the residence, to prevent ambient light spillage that may create a distraction for adjacent residential properties; and
    8. That portion of the residential structure where energy usage and heat exceeds typical residential use, such as a grow room, and the storage of any chemicals such as herbicides, pesticides, and fertilizers shall be subject to inspection and approval by the Grand Rapids Fire Department to insure compliance with the Michigan Fire Protection Code.

Just to name a few.

Landlords can control the use of their property in Grand Rapids by caregivers by enabling or not enabling the use of the property for a home-based occupation—or, more specifically, a Class B occupation. The application of the restriction on home-based occupations would need to be applied equally for all units at a property, not just enforced on caregivers. If you choose to allow a caregiver to operate out of your property, you may want to dig deeper into the restrictions above and establish criteria, rules, regulations, etc. that mirror the City’s intent within the Code. This could be done simply by referencing the code and providing the caregiver with a copy of the Code. At the very least, you are going to need to verify that the caregiver has the proper credentials under State Law and the local Code.

What about fair housing issues? Businesses are not a protected class. Discriminating against someone that intends to operate a business in your unit is not in violation of fair housing laws. However…

Tenants that are patients and users of medical marijuana are a different story. A tenant or prospective tenant may have a disability wherein marijuana is prescribed as a form of treatment. In these cases, the rental property owner must provide reasonable accommodation for the disability, i.e. allow the tenants to use medical marijuana within the limits established under State Law. If the need for the accommodation is not readily apparent or known, a property owner may request reliable disability-related information that shows the relationship between the person’s disability and the need for the use of medical marijuana. Keep in mind, however, just like with any disability, the tenant must tell you of their disability; you cannot ask them if they have a disability.

But what if the unit is a non-smoking unit? If the unit is a multi-tenant building (duplex or more), the property owner MAY have some leeway in this area. If no smoking is allowed in all units due to the health and safety of other tenants, a property owner may be able to deny the use of marijuana by smoke inhalation. However, due to the disability laws and reasonable accommodation, enabling a tenant to use some other form of marijuana might be required. You might not be able to deny the use of inhaled marijuana in a single-family unit. “Reasonable accommodation” might include enabling a vacating tenant to pay for any necessary repairs and clean up after they move out in order to return the property into the same condition in which it was before the medical marijuana user moved in, e.g. clean or replace carpets that smell of marijuana or have burn holes in them. For more information on reasonable accommodations, visit www.hud.gov/offices/fheo/library/huddojstatement.pdf.

What if my tenant does not have a disability as defined by the Fair Housing Act or Michigan Persons with Disabilities Civil Rights Act but simply has some other ailment/issue for which a medical practitioner has prescribed marijuana, e.g. restless leg syndrome? This is a bit trickier. Denying someone without a disability the use of marijuana within their unit wouldn’t be a violation of fair housing but might be a violation of their rights under the new State law. The jury is still out on this one too. There simply isn’t a clear answer. The law gives them the right to use it but not necessarily the right to smoke it or use it wherever they wish.

What’s the bottom line?

  • Decide in advance if you will allow a home occupation or home business to operate in your units. If you do, establish lease terms and conditions, property rules and regulations based upon State and local laws regarding the operation of home based occupations/businesses and medical marijuana.
  • Decide if your units will be non-smoking.
  • Be prepared to negotiate reasonable accommodations for tenants with disabilities or prospective tenants and put them in writing.