Sacramento County Modifies Cannabis Ordinances related to Rental Property
Cannabis has been a hot topic for the last couple years as the state and municipalities attempt to grapple with the legal use of cannabis. This led to cultivation restrictions, strict compliance ordinances and steep administratively penalties for violations. Today we look at a recent change to the Sacramento County ordinances that create safe harbor provisions for landlords when the landlord has complied with certain obligations.
As always, if you have any questions about your real estate, business, estate planning, or any other legal issue, please let us know by e-mailing managing shareholder Keith Dunnagan at kbdunnagan@bpelaw.com.
Also, remember that we do legal presentations for business and community organizations. If your group would like to schedule a presentation, please contact me to setup a date and time.
Sacramento County Modifies Cannabis Ordinances related to Rental Property
By: D. Keith Dunnagan, Esq.
Almost immediately after the legalization of cannabis in California, local municipalities began to adopt ordinances governing the cultivation of cannabis in residential properties. These regulations included the number of plants that could be cultivated, ventilation and electrical upgrades required, and adoption of strict liability penalties for non-compliance. Consequently, municipalities began to levy administrative fines against landlords for the violations of the tenants. Unlike federal law which created innocent owner exceptions for drug and cannabis-related offenses, the municipal ordinances did not.
However, in response to these ordinances the state responded by passing AB 2164 that provided a safe harbor rule for landlords provided the landlord did not know of illegal cultivation, a tenant was in possession and most importantly the landlord’s lease prohibited the cultivation of cannabis on the property. Most landlords use form leases and unfortunately, while the first two prongs were satisfied, the form leases did not prohibit cannabis cultivation thereby leaving the landlords exposed to liability.
Recently, a landlord challenged an administrative fine levied by the City Sacramento in the Thao Vo v. City of Sacramento case. In this matter, the City had imposed an administrative fine of $296,000 on the landlord based upon the City of Sacramento’s strict liability ordinance. In challenging the fine, the petitioner raised many arguments including constitutional and evidentiary challenges. The Court ruled in favor of the petitioner stating that there was insufficient notice to the landlord of what Code was violated (a technical argument because it appears that the citing officer may have cited the wrong code when issuing the citation) and lack of evidence that the landlord knew of the illegal activity of the tenant.
It has been evident for a while now that the ordinances as crafted and penalties being levied don’t match the offense they attempt to address. Landlords are significantly limited in their efforts to inspect their rental properties. Tenants have the right to quiet enjoyment of the premises they lease and violation of the rights can lead to significant penalties and damages in a courtroom. The arguments of municipal attorneys and hearings examiners about a landlord’s inspection duties often is outside the bounds of law and if landlords actually complied with the municipal attorneys and hearings examiners inspection requirements the landlords would violate Civil Code 1954.
In addressing the competing concerns Sacramento County addressed its administrative penalty ordinance regarding cannabis cultivation and recently made amendments. Most notably, the county placed an obligation on the tenant to get written permission from the landlord, which must be signed and notarized by the landlord authorizing the cannabis cultivation at the rental property (see 6.88.050 of Sacramento County Code). Further, under 6.88.060, the County created a safe harbor provision as well. A landlord would be safe from liability if all of the following conditions are met;
The property where the cultivation occurred is leased or rented by a tenant;
The owner can provide evidence of that the lease prohibits cannabis cultivation; and
The owner did not have actual knowledge of the illegal cannabis cultivation.
These changes are consistent with state law and provide a safe harbor for the landlord. If you are a landlord or an agent representing a landlord make sure the leases used are consistent with the safe harbor provisions of the state law and county ordinances. The compliance with the safe harbor provisions of the amended county ordinance and/or state law can be the difference between a large fine or no fine at all.
The attorneys at BPE Law Group have years of experience related to real estate issues that may affect your rights. No two situations are the same and each requires its own independent legal analysis of the facts. If you have a real estate or landlord/tenant issue related to cannabis the attorneys at BPE Law Group are hear to help.
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The attorneys of BPE Law Group, PC. have been advising our clients on real estate, business and estate planning issues for over 20 years and have assisted numerous clients in business and real estate matters and have represented and advised brokers on their professional obligations as well as consumers on their rights. If you have questions concerning legal matters, give us a call at (916) 966-2260 or e-mail Keith at kbdunnagan@bpelaw.com. Our flat fee consult for new clients may get you the answers you need for the questions you have.
The information presented in this Article is not to be taken as legal advice. Every person’s situation is different. If you are facing a legal issue of any kind, get competent legal advice in your State immediately so that you can determine your best options.
Cannabis has been a hot topic for the last couple years as the state and municipalities attempt to grapple with the legal use of cannabis. This led to cultivation restrictions, strict compliance ordinances and steep administratively penalties for violations. Today we look at a recent change to the Sacramento County ordinances that create safe harbor provisions for landlords when the landlord has complied with certain obligations.
As always, if you have any questions about your real estate, business, estate planning, or any other legal issue, please let us know by e-mailing managing shareholder Keith Dunnagan at kbdunnagan@bpelaw.com.
Also, remember that we do legal presentations for business and community organizations. If your group would like to schedule a presentation, please contact me to setup a date and time.
Sacramento County Modifies Cannabis Ordinances related to Rental Property
By: D. Keith Dunnagan, Esq.
Almost immediately after the legalization of cannabis in California, local municipalities began to adopt ordinances governing the cultivation of cannabis in residential properties. These regulations included the number of plants that could be cultivated, ventilation and electrical upgrades required, and adoption of strict liability penalties for non-compliance. Consequently, municipalities began to levy administrative fines against landlords for the violations of the tenants. Unlike federal law which created innocent owner exceptions for drug and cannabis-related offenses, the municipal ordinances did not.
However, in response to these ordinances the state responded by passing AB 2164 that provided a safe harbor rule for landlords provided the landlord did not know of illegal cultivation, a tenant was in possession and most importantly the landlord’s lease prohibited the cultivation of cannabis on the property. Most landlords use form leases and unfortunately, while the first two prongs were satisfied, the form leases did not prohibit cannabis cultivation thereby leaving the landlords exposed to liability.
Recently, a landlord challenged an administrative fine levied by the City Sacramento in the Thao Vo v. City of Sacramento case. In this matter, the City had imposed an administrative fine of $296,000 on the landlord based upon the City of Sacramento’s strict liability ordinance. In challenging the fine, the petitioner raised many arguments including constitutional and evidentiary challenges. The Court ruled in favor of the petitioner stating that there was insufficient notice to the landlord of what Code was violated (a technical argument because it appears that the citing officer may have cited the wrong code when issuing the citation) and lack of evidence that the landlord knew of the illegal activity of the tenant.
It has been evident for a while now that the ordinances as crafted and penalties being levied don’t match the offense they attempt to address. Landlords are significantly limited in their efforts to inspect their rental properties. Tenants have the right to quiet enjoyment of the premises they lease and violation of the rights can lead to significant penalties and damages in a courtroom. The arguments of municipal attorneys and hearings examiners about a landlord’s inspection duties often is outside the bounds of law and if landlords actually complied with the municipal attorneys and hearings examiners inspection requirements the landlords would violate Civil Code 1954.
In addressing the competing concerns Sacramento County addressed its administrative penalty ordinance regarding cannabis cultivation and recently made amendments. Most notably, the county placed an obligation on the tenant to get written permission from the landlord, which must be signed and notarized by the landlord authorizing the cannabis cultivation at the rental property (see 6.88.050 of Sacramento County Code). Further, under 6.88.060, the County created a safe harbor provision as well. A landlord would be safe from liability if all of the following conditions are met;
The property where the cultivation occurred is leased or rented by a tenant;
The owner can provide evidence of that the lease prohibits cannabis cultivation; and
The owner did not have actual knowledge of the illegal cannabis cultivation.
These changes are consistent with state law and provide a safe harbor for the landlord. If you are a landlord or an agent representing a landlord make sure the leases used are consistent with the safe harbor provisions of the state law and county ordinances. The compliance with the safe harbor provisions of the amended county ordinance and/or state law can be the difference between a large fine or no fine at all.
The attorneys at BPE Law Group have years of experience related to real estate issues that may affect your rights. No two situations are the same and each requires its own independent legal analysis of the facts. If you have a real estate or landlord/tenant issue related to cannabis the attorneys at BPE Law Group are hear to help.
——————————————————————————————————————
The attorneys of BPE Law Group, PC. have been advising our clients on real estate, business and estate planning issues for over 20 years and have assisted numerous clients in business and real estate matters and have represented and advised brokers on their professional obligations as well as consumers on their rights. If you have questions concerning legal matters, give us a call at (916) 966-2260 or e-mail Keith at kbdunnagan@bpelaw.com. Our flat fee consult for new clients may get you the answers you need for the questions you have.
The information presented in this Article is not to be taken as legal advice. Every person’s situation is different. If you are facing a legal issue of any kind, get competent legal advice in your State immediately so that you can determine your best options.