Cannabis Act

CitysearchCalgary - Monday, October 15, 2018

Cannabis is set to be legalized in Canada on October 17, 2018. Many Calgary home owners and renters, in both single family homes and in condominiums, are wondering how this will impact local Real Estate laws, insurance, and rights of landlords and tenants.

While cannabis will be legal, its use is typically restricted in both owned and rented condominiums, purpose-built apartments, and rental homes. Any restrictions must be clearly set out in the rental agreement and/or in the condominium bylaws.

Bill C-45, the Cannabis Act:

Bill C-45, the Cannabis Act, is set to come into full force on October 17, 2018. This allows Canadian adults who are of legal age to legally purchase, possess, consume and grow recreational cannabis. Each province will establish additional regulations, where some of these new regulations may affect real estate.

In anticipation of legalization, Alberta passed Bill 26, An Act to Control and Regulate Cannabis, which amends the provinces Gaming and Liquor Act, and covers everything pertaining to the possession, use, cultivation, and retail distribution of cannabis under one Act. Bill 26 allows individuals (aged 18 or older) the ability to purchase and consume cannabis, as well as grow up to 4 plants at home, and allows public possession of up to 30 grams. In addition, it also guides landlords and condo boards on their rights and obligations.

Now here's where we get to the important information...

Residential Tenancies:

Alberta has so far not legislated against cannabis use or cultivation in residential tenancies. However, the government of Alberta has published information stating that individuals may be restricted from growing or smoking cannabis in their homes based on rules established by their residential tenancy agreements with their landlords, which means that renters could face restrictions from growing and/or using cannabis in their residences depending on the agreement and rules set therein.

If you are a renter, you will find some new wording in leases… and many property managers are adding in new rules to prevent smoking and growing cannabis in its managed rental properties. Most owners are concerned about tenant using and growing cannabis. Nonsmoking (this includes, but is not limited to cigarettes, cigars, vaping, cannabis, etc.) schedules have been and will continue to be a standard clause of any Citysearch lease.

Alberta has not imposed restrictions on condo boards' ability to enact bylaws and rules restricting the use or cultivation of cannabis. This implies that condo boards and strata councils in each province are free to enact bylaws and rules that restrict smoking or growing cannabis; However, this may raise issues with respect to cannabis used for medical purposes.

Currently, medical cannabis is governed by the ACMPR (Access to Cannabis for Medical Purposes Regulations); However after October 17th, it will become repealed, and Bill C- 45 will come into law.

What are the implications for Calgary Homeowners that are renting their properties and are looking to keep cannabis out of their homes?

A Landlord, strata, or condominium board that attempts to restrict or prevent an individuals use of cannabis for medical purposes could find themselves violating the human rights codes and Canada's charter of rights and freedoms. However, on the other hand, the use of cannabis could be considered a nuisance to other tenants on leased homes and therefore could see conflicting differences.

According to some law resources, recent reviews of this situation suggests that no smoking provisions will take precedent, and therefore those looking to consume cannabis for medical purposes will have to do so in non smoking methods.

Residential insurance:

Home insurers often have clauses in their policies stating that they will not insure homes used for the production of cannabis. In a recent court decision in Saskatchewan, a judge held that such a clause dis-entitled a landlord form an insurance payout for damaged caused by their residential tenant's cannabis grow-up, even though the landlord had not given the tenant permission, nor had they been aware of the existence of the grow-op at the time. While this case was decided in Saskatchewan, similar clauses may be found in insurance policies across Canada.

Many insurance policies specifically exclude and do not insure for production of cannabis. It is recommended that you discuss terms and conditions with your insurance provider on personal growth that is allowed by the new legislation (four plants), as those who decide to grow could potentially run into coverage issues with their insurance providers.

Closing Thoughts:

There are still several areas regarding the legalization of cannabis, and it is important for consumers to stay on top of what will most likely be an evolving topic. While personal growth in the home will not be classified as a grow operation, that does not mean that there couldn't be disclosures required in the future for home sellers. Landlords may face challenges with the evolving laws and their personal stances, and condominiums will likely see bylaws put into place that could potentially not sit well with owners.

Citysearch strongly encourages all owners to consider their options and advise us in writing as to their position on permitting or not permitting the smoking of cannabis and their decision of tenant's growing (up to the legal limit) of cannabis in their rental properties.

To current and future tenants: The current Non-smoking Compliance schedule that is attached to each of your leases still stands and this covers the smoking of cigarettes, cigars, vapes, cannabis, etc. If at any point we determine a violation of the non-smoking compliance schedule, you will be responsible for the remediation (including and not limited to carpet cleaning, ozonation, repainting, humidification, etc.) if necessary.

A landlord or condominium corporation has the legal ability to prohibit in their buildings or on their properties:

Smoking of all substances including cannabis
Non-smoking consumption of cannabis
Growing cannabis plants

Occupants and condo owners should:

Check the lease agreement and the condo bylaws for cannabis restrictions
Not smoke cannabis or other substances where it is prohibited
Not grow or consume cannabis where it is prohibited

For additional information, please refer to www.alberta.ca/cannabis-condos-rentals.aspx In addition, here are a few interesting links for additional perspective on this subject.