Legislative Update as of April 20, 2011

1. MEDICAL MARIJUANA:

As many know, the hot issue of the impact of the new medical marijuana law in Arizona has many confused as to how they should proceed with their tenants and employees.  As of March 1, 2011, Arizona is still working on putting together guidelines to enact this new law.  The new Arizona Law is located at Title 36, Chapter 28.1 et seq.  This statute describes the restrictions for the legal use of medical marijuana.  Both employers and landlords are impacted by these new rules.  The law states in §36-2813 that no landlord shall refuse to lease to or otherwise penalize a person solely for his status as a cardholder.  That does not mean that the landlord may not evict a person who uses medical marijuana on the premises, however.  §36-2814 specifically states that this new law does not require any establishment to allow a client or guest to use medical marijuana on that property.  One of the real issues is that marijuana is still a Schedule 1 substance under the Controlled Substances Act (CSA).  See U.S.C. § 801 et seq. The Fair Housing Act, Section 504 of the Rehabilitation Act (Section 504), and Title 11 of the ADA prohibit discrimination against persons with disabilities in public housing and other federally assisted housing. 1 On January 20, 2011, the U.S. Department of Housing and Urban Development issued a Memorandum on the Subject of Medical Use of Marijuana and Reasonable Accommodation in Federal and Public Housing.  The Memorandum states that even though “otherwise disabled medical marijuana users are not excluded from the Fair Housing Act’s definition of “handicap”, accommodations allowing for the use of medical marijuana in public housing or other federally assisted housing are not reasonable.”  In the final analysis, it appears that the U.S. Department of Housing and Urban Development has unequivocally determined that at least as to federally funded housing, a landlord can refuse to permit the use of medical marijuana and other medical marijuana –related conduct.  

This does not mean that the landlord must evict a tenant if they or their guest use medical marijuana is compliance with state law.  There has been a suggestion that if the landlord agrees to grant a “reasonable accommodation request” by a tenant for the use of medical marijuana, the landlord must put in place specific standards for determining when the request would be granted.  The landlord may put in place an interactive process once a request is made that would look at the various factors involved in individual cases such as: the physical condition of the medical marijuana user, the extent to which the medical marijuana user has other housing alternatives (if evicted or if any public assistance would be terminated), the extent to which the landlord would benefit from enforcing lease provisions that prohibit illegal use of controlled substances, and whether there is an alternative accommodation that would effectively address the requester’s disability-related needs without a fundamental alteration to the landlord’s operations and without imposing an undue financial and administrative burden to the landlord.  An example of the above would be to permit the non-smoking use of medical marijuana (ie: ingested forms of marijuana).  Each property owner must make a decision on whether they will permit medical marijuana use on their property but looking at the pros and cons of the legal issues involved.  If the property owner decides to not permit the use of medical marijuana on their property, it is suggested that they immediately issue a notice to all residents to inform them that they will enforce the Crime Free Addendum in full, including any use of marijuana.  If the property owner is going to permit the use of medical marijuana, it is suggested that they use a Medical Marijuana Addendum. Both are available on our website.

1 42 U.S.C. § 3604(f)(1)-(3), 29 U.S.C. § 794(a), 42 U.S.C. §12132.

2. LANDLORD TENANT PEST CONTROL-BEDBUG BILL:

SB 1306 Prohibits landlords from knowingly leasing a bedbug infested unit and must provide all new and existing tenants with educational materials on bedbugs.  This law requires a tenant to refrain from knowingly moving bedbug infested materials into a unit and notify the landlord by written or electronic document of the existence of bed bugs.  The bill excludes single family dwellings from this law and prohibits cities from establishing their own ordinances regarding bedbug control.  Note:  The specific educational materials have not been drafted by the state. We suggest that you utilize a pest addendum that outlines both the Landlord and the Tenant’s obligations so that contractually the two parties are in agreement.  We have a Pest Control Addendum on the website.

3. SALES TAX ON RENT:

SB1160: The Governor signed this bill which prohibits a city or municipality from any new sales tax on residential rentals unless approved by that city’s voters.  This issue continues to come up every few years but at least it is no longer an issue for the time being.

4. SOLID WASTE:

HB2193:  Prohibits cities from requiring the payment for unpaid water and wastewater bills from anyone other than the person who made the contract, resided at the property and received the service.  This law also prohibits cities from refusing service to anyone on the basis of unpaid water and wastewater to anyone but the person who resided in the property and received the service.  Finally, the law allows property owners and immediate family members to voluntarily contract with a city for these services and pay for these services.

5. FIREARM RESTRICTIONS IN RENTALS:

This bill is dead but it was attempting to prohibit rental agreements from including provisions that would restrict firearms on the property.  As a reminder, tenants may carry firearms without a permit and not concealed under our Constitution and other laws.  However, a landlord may restrict the tenant from carrying the guns in common areas such as the office, pool area, etc but those restrictions must be in writing and part of your community policies.

6. CONDO RESTRICTIONS:

HB2609:  Makes various changes to the laws governing HOA’s.  This law prohibits HOAs from charging fees for the use or placement of an indoor or outdoor display of For Rent or Lease signs by a property owner on their own property.  This law also permits the HOA to prohibit signs that are not commercially produced.

HB2717:  This law follows the language in HB2609 about the signs and also clarifies that the HOA shall not prohibit in any other way than specifically authorized in statute the use of temporary signs for open house, sale or lease. This law takes away the HOA’s lien rights for a period of time if the HOA violates this law.

SB1149:  Limits the fee an HOA can charge for preparing resale documents to $400.00.

7. FIT AND HABITABLE:

SB1474: Requires a tenant to promptly notify the landlord in writing of any situation that requires the landlord to take action and make repairs.  Additionally, this statute prohibits a tenant from makes repairs under the self-help statute for any repair that does not constitute a breach of the fit ad habitable condition of the premises.

8. FIRE SPRINKLERS:

HB2153:  Prohibits cities from adopting an ordinance requiring the installation of fire sprinklers in single family homes.