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Posted: July 16, 2014

Marijuana and mold

Issues for landlords

Jeff Bacheller

Whether investing in residential rental properties as a primary or secondary source of income, landlords are being faced with property management challenges every day.  From simple repairs to tenant evictions, both experienced investors – and people who are new to the game – must be prepared and protected from anything that might confront a property they own.

Two of the more recent challenges to landlords include the growth and/or use of marijuana by tenants, and the reemergence of mold issues (due to the heavy rainstorms that hit the metro area last fall). 

Prohibiting marijuana use

When the recreational use of marijuana was legalized in Colorado, tenants may have believed that they had the right to use and even grow marijuana in the homes they were renting.  Obviously, this is hardly the case.  Both Colorado law and Federal law give property owners the right to prohibit the use, possession and growing of marijuana in any of their rental properties.  However, even with the support of state and federal law, landlords’ rights regarding marijuana have not been fully tested in court, and we may still be years away from any form of substantial case law. Additionally, even if a landlord suspects marijuana use in one of their properties, a phone call to law enforcement may not provide the immediate remedy it once did.  Often marijuana use does not appear to be as big of a priority as it once was several years ago.

The best way to address marijuana use in an investment property is to make it very clear in a lease agreement that marijuana use and possession is not permitted.  By including very specific language in a lease agreement, stating that the landlord has the right to “prohibit the use, possession and growing of marijuana in their rental properties” (based on the support of Colorado and Federal law), can give a landlord the important leverage they need to prohibit marijuana use in their properties.

There are still many questions that remain, but an experienced property management company can provide important guidance to landlords who want to keep marijuana out of their properties.

Addressing mold issues

Last fall’s heavy storms created numerous water issues for landlords, from leaking roofs to water seeping through foundations.  It was undoubtedly an aggravating, and expensive issue at the time, and has created new problems with mold beginning to sprout in homes this past spring and summer.

Environmental issues have always been a significant challenge for landlords who are seeking insurance coverage that will adequately protect them and their resources.  The reemergence of mold in Denver metro properties is making the search for insurers even tougher.  Beyond speaking to current or potential insurers, a landlord must make sure that they are taking care of all the “basics” to protect their properties against mold.  This includes roof, gutter and ventilation inspections,  and also the inspection of foundations (especially those with a wood sub-floor).  Proper ventilation and moisture extraction under these types of floors is critical. Proper lease language that requires tenants to notify the Landlord of mold and guidelines for addressing mold can give Landlords another tool to resolve a mold problem with a current resident.

Landlords should also have a proven system in place to check the backgrounds of potential tenants.  Some less-ethical tenants will file questionable lawsuits against landlords (especially in regards to mold or other environmental issues), in hopes of forcing a landlord to settle out of court, and collect a quick payoff.  Experienced property management companies can provide background checks, and also recommend the best resources for inspections, property insurance, and even legal representation, if required.

 Residential rental properties are a strong investment option for people who have the resources and fortitude necessary to take on longstanding, everyday issues, as well as the unique challenges that are “part of the business”.  While marijuana possession is new to the scene, and mold issues are reemerging, there are companies that can provide the necessary support to help landlords through these issues, and still achieve their financial goals.

Jeff Bacheller is an owner of Real Property Management Colorado, the leading property management company for single family homes, condos, townhomes and small apartment buildings.  He can be reached at 303-873-RENT (7368)  or j.bacheller@303RENT.com More information is available at www.303RENT.com.

Enjoy this article? Sign up to get ColoradoBiz Exclusives. The opinions expressed in this article are solely that of the author and do not represent ColoradoBiz magazine. Comments on articles will be removed if they include personal attacks.

Readers Respond

Really good article, touching on an issue that I bet many haven't thought about. Here's another one: here in GJ a few years ago, owners of a fledgling medical MJ growing enterprise got into serious trouble when they placed some insecticide 'bombs' in the building on a Friday, then left for the weekend. Problem? The adjoining office in the same building housed employees of the U.S. Census department and both shared a common ventilation system. Many got very ill Monday morning when they showed up for work, some requiring hospitalization. I don't know how this was resolved, there may have been law suits aplenty. By Vicki Felmlee on 2014 07 16
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