Canada's Condominium Magazine

Marijuana Legalization Update Part II: Information for Property Managers and Condo Boards

Part 2 of a 2-part update on Marijuana legalization in Canada. [For Part 1, see>>]

The Ontario Real Estate Association (OREA) revealed a five-point proposal for the provincial government to adopt upon legalization of the substance on a federal level:

  • Designate illegal grow operations as unsafe under the Building Code Act.
  • Mandate that illegal cannabis operations are inspected by a municipal building official.
  • Require municipalities to register remediation work orders on the title of a former grow operation.
  • Mandate that all licensed home inspectors receive training on how to spot the signs of a former marijuana grow operation.
  • Restrict the number of plants a homeowner can grow from four to one in units 1,000 square feet or smaller.

New laws under the Cannabis Act in Canada will allow homeowners to grow up to 4 cannabis plants (not to exceed 100 cm in height). Condo Boards and management can regulate cannabis in a community, however, so owners and tenants should not assume they can grow “pot” in the condo. Some condo managers and owners are concerned over health issues from second-hand smoke, balcony smokers, and possible health issues related to growing of the plants.

 

Property managers and Condo Boards can regulate their communities

In addition to regulations set forth by the federal and provincial governments, there is much that individual property managers and condo boards can do to regulate cannabis growth and use within their own buildings.

However, the decision whether to adhere to the new legislation or ban the substance from the building altogether is one with which many are struggling. On one hand, nobody wants to punish those who would be following the law as it stands. However, ignoring the concerns of other owners and tenants is not a good idea either. Plus, there is the concern over property values, public health, maintenance and repairs, etc.

Outright ban in a condominium

If the condominium outright bans the substance, tenants may choose to sell or terminate their leases and move elsewhere. However, failing to ban (or at very least regulate) the substance may cause even more tenants to leave. It is sort of a catch-22 for those in charge. Regulating the substance without banning it entirely is possible, but doing so in a way that benefits everyone involved will take some work.

 

In Canada, Marijuana will soon be legal even for recreational use, although it will be regulated in use, distribution and growth — and, importantly, Condo Boards and managers can implement bans in their communities for various reasons.

 

The first order of business should be to give all owners and tenants a proper forum in which they can relay their concerns, as well as inform the condo as a whole of any intent to either buy, sell, grow, or consume the substance and in which form they plan to do so. As stated above, edibles are not permitted for the time being, so requiring it to be consumed in this form is not feasible.

Pot growth in the complex may be a concern for individual owners or tenants, especially if expenses are shared. For instance, the water bill may go up drastically for everyone if there are quite a few tenants who grow the substance on a regular basis. Reworking the agreement to more fairly and accurately distribute the expenses (or requiring each unit to be solely responsible for their own usage) can ease everyone’s mind.

Property value and other concerns

Another key concern for building owners is property value. Once a unit has been used for the purpose of marijuana growth and/or use, its status as such can never be reversed, which means that the unit’s value takes a significant dive, negatively impacting future sales. A major reason for this is that significant damage could result from cannabis growth and use. Marijuana growth requires a great deal of humidity, which can result in mould and mildew. Lingering smoke, damage to walls, and potential health issues are also a concern for potential renters and buyers.

Even if the unit receives the necessary maintenance and repairs, it can be costly and still not undo the damage that could be done over time. One solution for this may be to alter the lease so that tenants who grow or smoke the substance are required to pay their own portion of the utilities, as well as maintenance and repair costs whenever damage is strictly marijuana-related. However, keep in mind that a lease generally cannot be changed once it has been signed. A new, updated lease will need to be filled out, which will require a discussion of the terms and a mutual agreement.

 

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