Is Violation of a Federal Law a Material Condition that must be disclosed?
This was the question I posed to many real estate licensees recently when discussing whether they should inquire as to whether medicinal marijuana has been grown at a home they are being asked to list for sale. NRS 645.252 requires real estate licensees to disclose any material conditions of the property they know about or, through the exercise of reasonable care and diligence, they should have known about. In Nevada, a person is permitted to grow the permitted number of plants if certain conditions are met. While the activity is permitted under state law, it remains a violation of federal law. Many agents seem to take a relaxed view of the subject in light of the federal government’s statements that they do not intend to actively enforce the law. However, several recent incidents have caused concerns that emphasize the importance for agents to be more careful than ever.
One commercial agent advised me that in light of the number of potential dispensary clients that contacted him looking for appropriate locations, he contacted the United States Department of Justice for guidance. He was informed that they are an enforcement agent and would enforce the law. Several weeks later he found it odd that his phones were not working correctly and came to learn his phone was being tapped! Moreover, the Obama administration has recently decided marijuana will remain on the list of most dangerous drugs despite growing support across the country for broad legalization. Marijuana is placed in the same category of drugs as heroin because they are considered as having no medical use according to the Drug Enforcement Administration.
Nevada residents have been permitted to grow marijuana legally under state law since 2001. However, it wasn’t until August 2015 that Nevada first medical marijuana dispensary opened. Despite Nevada’s lenient attitudes toward medicinal marijuana, in light of concerns regarding the federal government’s view of the drug, licensees should continue to be vigilant about disclosures and great caution should be used in their approach regarding this subject.
Drizin Law is providing this information for educational purposes only. It should not be construed as legal advice or a legal opinion as to any specific facts or circumstances. This information is based on general principles of Nevada law at the time it was created and you should be aware laws frequently change. Moreover, the laws affecting you may differ depending on the circumstances. You should consult with a qualified attorney in your own state or jurisdiction concerning your particular situation. A review of this information does not create an attorney-client relationship.