Michaela Phillips, Guaranteed Rate, Inc.

Michaela Phillips, Guaranteed Rate, Inc.

It’s an all-too-common dilemma occurring across the United States: someone receiving federal housing assistance – such as Section 8 – receives a devastating cancer diagnosis. Per their doctor’s recommendation, they begin using medical marijuana to help treat the effects of the illness. After receiving complaints from other tenants who suspect marijuana usage, the landlord gives the tenant notice of eviction for possessing an illegal substance in a federally-subsidized housing unit. While the renter may plead for a second chance or even offer to give up future medical marijuana usage, chances are that the landlord will be unwilling to reconsider the eviction.

The clash between federal and state laws are at the heart of this conundrum. Although medical marijuana is approved in 28 states, it remains illegal under the federal Controlled Substances Act, which is how landlords justify evicting tenants for possessing an illegal substance.

When confronted with a tenant who may be using medical marijuana, landlords generally feel like their hands are tied. They don’t want to risk breaking federal law or lose their federal funding, after all. But there are some misconceptions at play here, which we break down below.

First of all, in order for landlords to rent to low-income households receiving Section 8 funding, they are contractually bound by the Housing Authority Payment (HAP), and must follow federal Housing and Urban Development (HUD) regulations. One such regulation is the Quality Housing and Work Responsibility Act of 1998 (QHWRA), which states that the landlord must “establish lease provisions for continued assistance in federally assisted housing that allow the owner to terminate the tenancy or assistance,” should the landlord discover that a tenant is in possession of an illegal substance. What this means is that, under QHWRA guidelines, landlords retain the right to evict or terminate assistance at all times. To simplify, the regulation does not state that landlords are required to evict or terminate assistance – they are required to preserve their discretion when such situations arise. This could mean choosing to evict – or not evict – a tenant.

Even with this discretion offered by the statute, many landlords continue to believe that eviction is the only solution when confronted with medical marijuana in properties.

In response to the confusion, HUD released an official statement in 2011 that explicitly confirms that landlords are NOT required to evict tenants found in possession of marijuana in states that have legalized it for either medical or recreational purposes.

In keeping with federal law, the statement specifically prohibits landlords from affirmatively permitting possession and use of marijuana, but instructs landlords to “establish policies which allow the termination of tenancy of any household with a member who is illegally using marijuana medical marijuana in federally-subsidized housing.” The statement goes on to give landlords and PHAs “discretion to determine, on a case-by-case basis, the appropriateness of program termination of existing residents for the use of medical marijuana.”

Navigating the myriad federal and state regulations pertaining to medical and recreational marijuana can be daunting and difficult.

By Michaela Phillips, Guaranteed Rate, Inc.
Michaela Phillips is the Vice President of Mortgage Lending at Guaranteed Rate, Inc. Contact Michaela at 303.579.5517, e-mail [email protected] or visit michaelaphillips.com. NMLS:312874.