OLCC Cannabis-Licensed Tenants: Beware of Self-Help Evictions
If you are a tenant operating an OLCC cannabis-licensed business, there is a high chance the lease you signed allows the landlord to evict you without having to go to court. These "self-help" commercial evictions are permissible under Oregon law. In a self-help eviction, the landlord evicts the tenant by terminating the lease and changing the locks. The lockout must be done in a peaceable manner and without force. Landlords are often wary of self-help evictions because tenants can sue them for damages based upon claims such as conversion, breach of the covenant of quiet enjoyment, and trespass. However, many landlords are willing to lock tenants out and take their chances. This is never a good result for a tenant, but for tenants with OLCC cannabis-licensed business on the premises, it can be disastrous.
The Risk and the Details
Tenants with OLCC licensed cannabis businesses need to avoid the self-help eviction at all costs or risk losing their licenses. The reason is found in the OLCC administrative rules which state,
"A licensee or laboratory licensee must at all times retain control of, or the right of access to, all or any part of the licensed premises. Except as provided in OAR 845-025-1160(5), failure to retain such control or right of access is a Category I violation and may be grounds for immediate suspension or cancellation of the license." OAR 845-025-8520(3)(c).
If the landlord terminates the lease and locks the tenant out without notice, that tenant has lost access and control of the licensed premises. Once locked out, the licensee has missed the 15-day window to provide notice to the OLCC of a change of location under OAR 845-025-1160(6)(b). With loss of possession to the licensed facility, the licensee is at the mercy of the OLCC who has the discretion to find a Category 1 violation and cancel the license. The licensee's best option is to negotiate with the landlord to get the lease reinstated immediately. If that fails, the licensee has no choice but to notify the OLCC and attempt to explain what happens. The OLCC has legitimate concerns to make sure the marijuana inventory is secured and disposed of properly. The landlord, after a self-help eviction, has its own concerns taking possession of a large amount of marijuana without a license can bring Oregon criminal laws into play. Both the landlord and the tenant should seek guidance from an experienced cannabis attorney in the self-help eviction situation.
A tenant can avoid being locked-out without notice by negotiating language into the lease requiring the landlord to give it more than 15-days' notice before using self-help. Ask the landlord if such a notice provision could be added to your current lease through an amendment. Tenants should also maintain good communication with their landlords, especially when rent is past due or the landlord is claiming a breach to another provision of the lease. If rent is past due, open and honest communication with the landlord to work out a payment plan can go a long way to avoid bad situations like the self-help eviction.
If you have any questions or need assistance with negotiating an amendment to your current lease, do not hesitate to contact our firm at email@example.com.