AgentRentals

Terminating tenant over medical marijuana use risky

Rent it Right

Q: Our apartment community has a no-smoking policy, both in the individual units and in common areas. The policy is prominent in our ads, property signage and in our leases, and warns tenants that repeatedly breaking the rules is grounds for termination.

Recently, a resident complained of smoke coming from an adjacent unit and into his windows. Turns out, it was marijuana smoke, which the tenant claims she was using for medicinal purposes. Our state allows for medical marijuana use — assuming this tenant is abiding by the law, she is nevertheless breaking our policies. Can we terminate her tenancy if she refuses to refrain from smoking? –Brian and Cathy

A: Nonsmoking policies in apartment communities are becoming increasingly common, with several cities across the country actually requiring them to be smoke-free (even the U.S. Department of Housing and Urban Development has urged public housing agencies to adopt smoke-free policies). These policies are perfectly legal, because they regulate behavior (smoking) that is not protected by law. In general, such policies are no different than a no-pets rule. Both activities can be prohibited by landlords as long as the landlord doesn’t apply the policy in a discriminatory way.

The fact that your state sanctions medical marijuana use doesn’t change this analysis. The state also sanctions and regulates many activities that, again, you can address with rules.

For example, suppose you prohibit home businesses on the property. A cosmetology worker needs a license to practice, but even when a tenant has such a license, your policy makes it impossible for a tenant to open up a beauty salon on site. Your tenant wouldn’t have a legal gripe.

I can think of one situation, however, in which you might experience a serious challenge to your policy. Suppose your marijuana-smoking tenant is legally disabled and is using marijuana to treat her condition? Landlords must, under federal law, accommodate tenants with disabilities when the tenant has asked for a variation on a policy or procedure that is necessary to enable the tenant to live safely and comfortably in the rental. However, the request must not result in an unreasonable burden on the landlord’s business.

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Allowing one tenant to smoke in an otherwise smoke-free building may have serious repercussions for you — other tenants will complain (as has already happened) and could probably legally break their leases and leave, leaving you with empty units and no rent income.

Before anyone marches off to a lawyer’s office, however, you’d be well served to have a conversation with this tenant. If the tenant does not claim to be legally disabled, you’re on solid grounds to insist that the no-smoking rule be observed. But if you’re dealing with a legally disabled person, you’ll need to tread carefully, and perhaps invoke the assistance of a local fair housing group to help the two of you come to a solution that everyone can live with.

Q: We’ve got a lease in Illinois with a $20 per day late fee ($1,500 monthly rent), which applies even on the weekends. My husband and I fell on tough times for the last two months, and have paid our rent late, and now we’re looking at well over $800 for late charges, even though our security deposit is more than $1,500. I know we were late, but I do feel the fees are excessive, and I don’t understand why the landlord can’t just take it from the deposit. –Nate

A: Only about one-quarter of the states have clear late-fee laws. They specify an outer limit, and also impose restrictions on daily amounts. Some express these amounts in flat terms (so many dollars per month), while others use a percentage of the rent. Landlords and tenants in these states can easily determine when fees are legal.

In the rest of the states, the situation is a bit less satisfactory. Not that there’s no law on the subject — in every state, the fees must closely approximate the actual money damages that the landlord suffers when the rent is late. These damages include staff time spent trying to get the rent, and lost interest. Fees that bear no relation to these costs are likely to be seen as excessive by a court, and disallowed. Put another way, they become penalties, which are not appropriate in consumer transactions. Landlords who announce a late-fee policy must be sure that the fees are a close approximation of their actual losses.

Illinois is one of these "actual damages" states, although the Chicago Residential Landlord-Tenant Ordinance does cover the subject ($10 per month for rents under $500; an additional 5 percent per month for that part of the rent that exceeds $500). If your unit is subject to the Chicago ordinance, it’s pretty clear that the fees are not legal (your maximum fee would be $60). But even if you’re stuck with the less precise "close approximation" of actual damages rule, I doubt your landlord’s policy would pass legal scrutiny. There’s no way that he has lost anything close to $800 as a result of two months’ late rent.

If your landlord is concerned about getting the rent, he needs to consider whether he should continue to rent to you — there’s nothing stopping him from serving a pay-or-quit notice when you’re late. He cannot use a punishing late-fee scheme to extract more rent. Nor, incidentally, can you demand that late fees be taken from the deposit. The security deposit is meant for unpaid rent and damage. Late fees must be collected separately.

Incidentally, it wouldn’t do you any good to have the landlord use the deposit anyway — he’d be within his right to demand that you replenish it immediately. As for counting weekends when applying the fee policy, there’s nothing illegal about that.

You’ll need to think carefully about how to handle this situation. If you’re still behind in the rent, you’re at risk for termination. Refusing to pay the late fee is the least of your problems; you need to come to some understanding with your landlord on how you can get back in the black. If you are paid up or have arrived at a plan, have a conversation about the fee and let the landlord know that you will contest it should he attempt to take it from your deposit when you move out.

Janet Portman is an attorney and managing editor at Nolo. She specializes in landlord/tenant law and is co-author of "Every Landlord’s Legal Guide" and "Every Tenant’s Legal Guide." She can be reached at janet@inman.com.

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