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I've been a lurker for quite some time, I always go to fatwallet for valuable advice. Now when I'm faced with dilema I'm here to ask some guidance again. Thank you in advance for reading and hopefully replying.

My situation is such. I have a home in and rent out one floor. My friends run a day care for 3-4 small kids and they really want to move in since a lot of parents would find this location ideal.

I know these people for a very long time, they great couple and are true friends. I believe they would never intent any harm to me or my property.

Could I be somehow harmed if anybody decides to sue for some reason, since there will be kids on property etc and all the risks concerned with day care etc? I understand that they will have to have liability insurance and I will have to be named as insured.

Am I missing something as far knowing about my responsibilities as a landlord to family that intents to run day care? I just talked to another friend and she was really concerned that I might be putting myself and property at risk due to possible lawsuit if anything were to happen? How risky is that? I know they are good people and I trust them completely, and I do understand that money issues do affect friendships but times are tough, I need that empty floor rented since I don't need the space. It's a separate apartment with its own gate, etc they will share yard with me and that's also where kids might play. Please post all your ideas about how can I not make something I will regret later?

Thank you !

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I noticed it... I was just too lazy to comment on it.

DTASFAB (Feb. 28, 2010 @ 10:43p) |

you can be sued if someone is injured on the property... and daycare is a high-risk activity.

the standard CAR and AOA le... (more)

Crazytree (Feb. 28, 2010 @ 10:45p) |

Yeah, but certainly there's going to be higher liability if he's got 6-8 young children to pay for rather than just some... (more)

drieendertig (Mar. 01, 2010 @ 11:52a) |

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Talk to your attorney.

He will probably tell you not to do it, but your goal should not be to get specific advice from him, just the potential nature of pitfalls and liability you might have in such a circumstance.

Also check out this google search I did:

http://www.google.com/search?hl=en&source=HP&q=liability+for+landlord+for+daycare&aq=f&aqi=&aql=&oq=

Looks like there might be some decent information for you to peruse on the subject.

Your post isn't entirely clear on the situation. Do you live on one floor and will rent out the other? The other floor has it's own "gate"? Do you mean separate entrance? Are there any common spaces that you would be sharing with the tenant (other than the yard)?

If it is considered a separate unit, you cannot legally prevent them from running a daycare (provided they are within state parameters):
http://www.childcarelaw.org/docs/qandarightsresponsibilitesfcchomesinrentalproperty.pdf

If they are considered a roommate or "renting a room" from you, this may not apply. Some landlord/tenant laws do not apply in roommate/shared home situations.

Presuming the law doesn't force you to allow them, I'd say hell no. I wouldn't want other people's kids running around my property. Plus all the parents coming & going. What if your friend has an emergency and had to run out? They will ask you to keep an eye on the kids.

The liability issue sounds risky to me. Even if the friends wouldn't do anything "intentionally" if a kid gets hurt playing in your yard, I have no doubt the parents would sue the tenant AND you. Even if the tenant has insurance, if the parent wants to sue above and beyond the limits of the tenant they would name you also.

This makes me glad I haven't yet run into a tenant who wants to run a daycare ... sounds like a lot of trouble to me.

Correction ... you might want to look up a more current document on the CA law requiring landlords to allow daycare. I just found another document (apparently more current) that says you ARE allowed to require insurance. This makes a LOT more sense and if the tenant can find a large enough policy it may make it a less risky proposition (enough coverage so you aren't at risk).
http://www.californialandlordsolutions.com/

It's fairly common for residential tenants to start a daycare. Some landlords don't like it, some say if they're paying the rent on time who cares.

The more relevant question in my opinion is, do you want to be a landlord to your friends? Is it worth risking your friendship on this arrangement where they will not only be your tenants, but also living as your neighbor and staking their rent on a daycare business you have questions about?

I think you'd save yourself a lot of trouble, long term, by getting a tenant who isn't a friend or relative.

IMO not a good idea. Sounds like a very sticky situation -- you've got a friend wanting to rent your place, and they're going to be running a business; they will also be your neighbor.

If they're too loud, don't like how you're maintaining the property, get sued, or decide to sue you, how are you going to deal with it?

The day care center will require a State license. There are several more legal requirements for running a day care center, but a State license is a place to start.

seems your concern should extend beyond your friends --- they would be running a day care available to the public --- the public means strangers with kids and strangers that might sue --- forget the friendship for a moment and get legal advice --- and advice specific to your jurisdiction



....

I'm a licensing attorney for the State of California. The day care has to be licensed. Interestingly enough, for a small family home (under 8 children) I do not believe insurance is required. (I do more work with the licensing of group homes/foster care homes so forgive if I'm not totally up on the regulations.) Your post describes a situation wherein you will be sharing a common area of the facility. If the day care licensees list your common yard as part of the facility and you share that common yard, you will have to be fingerprinted and cleared. If you have a recent violent crime, you are in luck -- you most likely will not get clearance and then they can't have a day care.

Bad news is that I do not believe you can discriminate against tenants who want to have a family child care home license. I don't think you are necessarily liable for anything that happens at the day care stemming from the day care licensee's negligence, but as a land owner (this is true for all landowner/occupiers) you have have a heightened duty to inspect for dangers and cure any dangers that are on your property. The good news is that licensing will make an inspection of the property prior to licensing to make sure there are no obvious dangers. And if your friends are licensed and should something happen, the injured plaintiff will most certainly go after the deep pocket -- the State of California. Good luck with that. It sounds like a perfect hell to me.

SoSiouxme said: If the day care licensees list your common yard as part of the facility and you share that common yard, you will have to be fingerprinted and cleared. If you have a recent violent crime, you are in luck -- you most likely will not get clearance and then they can't have a day care.

That's an interesting way out of the state requirement that landlords must allow day care facility on their property. Become a registered sex offender so the daycare can't move in.

I wonder if the daycare licensing would also be denied if the offender simply owned the property but didn't live there? Surely the landlord would have reasonable cause to sometimes be at the property for repairs, inspections, and preventative maintenance. So if the landlord/owner was a registered sex offender, would the daycare still be allowed (but the offender not allowed on his/her own property)? Or would his/her status take first priority and therefore the daycare license would be denied?

The guy can deny renting simply bc he doesnt want to rent to friends and strain the relationship.

he doesnt need to deny renting "because you intend to operate a daycare" (he would be a fool if he said that).

OP I recommend against it. It shouldnt be difficult to find good tenants and it doesnt MATTER that you trust and like these people... business isnt about being friends.

Nooooooo Not a daycare, Not a place for children to be safe. Not in my neighborhood, Jeepers, it is a daycare, not a methlab. Make sure they follow the laws in your community and be happy, you will have renters who will be able to pay the rent every month and be doing something that helps keep your neighborhood a neighborhood.
Childcare is a valuable commodity and parents need it to work.

He also will live in the house , and daycares are extremely noisy and disturbing.

If he wants to lose all the quiet enjoyment of his home, a daycare is a great way to do it

I'm pretty sure there is no law about having to like kids. Hmmm...but it is CA.

I think the question is whether the owner/landlord is at risk for losing all his/her worldly possessions if something happens to a child. In a state where media frenzy and multimillion dollar verdicts can happen, the answer is yes. No amount of insurance could be enough to completely cover the possible claims. Will it happen, unlikely.
What if someone alleges child abuse even without proof like in Mass. ?

A lady we know was using her best friend's mom for in-home daycare for a couple years. One day her child had a minor dog bite from the provider's dog. The child care giver did not contact a doctor or anything. When the child's mom took the kid to a doctor and explained what happened the friendship ended. One side was mad that a doctor was not contacted and the other side was mad because one was. There was no lawsuit or anything. Don't risk the friendship because crap always happens.

SoSiouxme said: I'm a licensing attorney for the State of California. The day care has to be licensed. Interestingly enough, for a small family home (under 8 children) I do not believe insurance is required. (I do more work with the licensing of group homes/foster care homes so forgive if I'm not totally up on the regulations.) Your post describes a situation wherein you will be sharing a common area of the facility. If the day care licensees list your common yard as part of the facility and you share that common yard, you will have to be fingerprinted and cleared. If you have a recent violent crime, you are in luck -- you most likely will not get clearance and then they can't have a day care.

Bad news is that I do not believe you can discriminate against tenants who want to have a family child care home license. I don't think you are necessarily liable for anything that happens at the day care stemming from the day care licensee's negligence, but as a land owner (this is true for all landowner/occupiers) you have have a heightened duty to inspect for dangers and cure any dangers that are on your property. The good news is that licensing will make an inspection of the property prior to licensing to make sure there are no obvious dangers. And if your friends are licensed and should something happen, the injured plaintiff will most certainly go after the deep pocket -- the State of California. Good luck with that. It sounds like a perfect hell to me.


Could he ask the parents to release him from any premises liability he would otherwise have as landlord?

Since day care is a buisness you might check your zoning is it zoned to allow for a buisness such as a day care?

SUCKISSTAPLES said: The guy can deny renting simply bc he doesnt want to rent to friends and strain the relationship.

he doesnt need to deny renting "because you intend to operate a daycare" (he would be a fool if he said that).

OP I recommend against it. It shouldnt be difficult to find good tenants and it doesnt MATTER that you trust and like these people... business isnt about being friends.


This is good advice from a practical standpoint. Use the friendship as an excuse for declining to let them become tenants.

The attorney who posted above is likely wrong, in part. A landlord should very well be able to tell a potential tenant that they cannot operate a business on the landlord's residential property, without even getting to the issue of what kind of business it is. Additionally, if there is an accident of any sort that is even slightly attributable to the premises and not the provider, the parents will be sueing everyone who might be able to contribute toward a settlement, not just the daycare provider or its insurer (the state likely has governmental immunity). This may cause problems because the landlord's homeowner's insurance policy will probably have an exclusion for claims that arise from the operation of a business in the home and may specifically exclude coverage for daycare businesses, unless the policy holder purchases a daycare rider. Thus, the landlord may find himself or herself sued and not have insurance coverage.

OP, it would be foolish to let your friends operate a daycare in your home. Maybe it would work out, but the risks of something bad happening either to the friendship or to the children in the daycare or their parents is too high to be a sensible risk.

lousygolfer said: SUCKISSTAPLES said: The guy can deny renting simply bc he doesnt want to rent to friends and strain the relationship.

he doesnt need to deny renting "because you intend to operate a daycare" (he would be a fool if he said that).

OP I recommend against it. It shouldnt be difficult to find good tenants and it doesnt MATTER that you trust and like these people... business isnt about being friends.


This is good advice from a practical standpoint. Use the friendship as an excuse for declining to let them become tenants.

The attorney who posted above is likely wrong, in part. A landlord should very well be able to tell a potential tenant that they cannot operate a business on the landlord's residential property,


Dont know what it is I am wrong about. Just like CC issuers dont tell you the "real" reason they are taking certain actions, its simpler to just say you dont rent to friends, and would be foolish for a landlord to mention anything about the daycare/business in general.

Always pick the safe/easy/ "least likely to result in a fair housing hearing" reason

lindylady said: Since day care is a buisness you might check your zoning is it zoned to allow for a buisness such as a day care?

See the documents I linked earlier. In California, daycare under a certain number of children is not considered a business and cannot be restricted by zoning (6-12 children depending on the license type). Additionally, a landlord cannot prohibit someone from operating a daycare. If we are questioning whether he MUST allow them to operate we only consider whether the law applies to him. If it's considered a separate unit, then it applies. If not, it's not clear (based on what I've read) if it applies. The law applies to daycare in a single family residence (but also defines that as apartments, condos and other MDU structures). IANAL, but I'd consider "single-family" in this case to then mean 1 family living in a residence so a roommate situation (renting out part of your home) I think could be disallowed. But, I'd consult a real lawyer (as opposed to me the Internet lawyer) to see if the law really applies in this case. Strangely, this law falls under the Health & Safety Code rather than the traditional civil codes that cover landlord/tenant situations. This makes it less clear how to handle a "roommate" type situation (many landlord/tenant laws only apply to entire units for rent, rather than shared living space or simply renting a room).

SIS is correct and if OP decides not to rent to the friend, it should simply be because it is a friend and NOT because they want to operate a daycare. On that note, OP, heed my warning: renting to friends is a bad idea and can lead to noise, damage, and liability issues. It's best to avoid renting to friends. It's also a bad idea to let real life friends (that may wish to rent from you) know that you use FatWallet or know your username.

drieendertig said:

Could he ask the parents to release him from any premises liability he would otherwise have as landlord?


Not likely such a release would be effective. Besides, so long as the landlord did not hold himself open as a licensee of the day care, he's not legally responsible for the negligence of the day care providers. The only liability I would see is if a child injured himself/herself as a result of the dangerous conditions being maintained by the landlord. So if the tenants said "Gosh Landlord, I smell gas in the house. There may be a leak," and Landlord ignored this and the place blows up, yeah, there might be liability - but this would be true whether there was a day care or not.

I think the liability issues are way overblown. Fact is thousands of family child care homes operate in the state out of rental properties. When there is a law suit, they go after the State of California or IF the licensees are homeowners, they may go after the homeowners' policies.

In a lot of these family child care homes in lower-income neighborhoods where the homes are rentals, many of the licensees are "judgment proof." Something to think about when you deciding who is going to watch your kid while you are at work.

lousygolfer said:

The attorney who posted above is likely wrong, in part. A landlord should very well be able to tell a potential tenant that they cannot operate a business on the landlord's residential property, without even getting to the issue of what kind of business it is.


If you are referring to me, I'm pretty sure I'm not wrong about the law in California making a landlord unable to discriminate from renting a residence to a tenant because they want to operate a family child care home. Did I mention I work in precisely this field? In California, the statutes and regulations governing family child care homes really don't treat them like a business so much as a social service. This in my opinion, is part of the problem. If these enterprises were treated more like a business, we would have more qualified providers and much less oversight would be needed.

lousygolfer said: A landlord should very well be able to tell a potential tenant that they cannot operate a business on the landlord's residential property, without even getting to the issue of what kind of business it is.

In CA, where OP is, this is incorrect (see the linked documents in my first post). Properly licensed daycare is not considered a "business" for the purposes of zoning or lease restrictions. The law specifically addresses lease restrictions and says they are void when applied to a daycare situation.

The law in CA regarding this situation is WAY too tenant friendly in my opinion. While liability insurance is an option (tenant can either get insurance for $100k (per occurance, $300k annual), get a $300k bond, or get affidavits from parents they acknowledge there is no insurance/bond and that landlord's insurance MAY not cover them), it doesn't necessarily protect the landlord. While the landlord can ask to be named as an additional party insured/bonded, the landlord must incur the cost associated. Additionally, if being named as an additional party causes the insurance/bond to be cancelled or non-renewed, it's not allowed.

This type of situation really ties the hands of landlords.

My worst nightmare would be an already moved in tenant notifying me they are going to operate a child care. If the tenant hasn't moved in yet it's much easier to deny for another reason. Once they are moved-in, it would be a fine line trying to terminate tenancy ("non-renewal").

SUCKISSTAPLES said:

Dont know what it is I am wrong about.


I believe he was talking about me, the licensing attorney.

SoSiouxme said: SUCKISSTAPLES said:

Dont know what it is I am wrong about.


I believe he was talking about me, the licensing attorney.
He was quoting my post so I assumed he was refering to me.

Too many attorneys in this thread.

SUCKISSTAPLES said: SoSiouxme said: SUCKISSTAPLES said:

Dont know what it is I am wrong about.


I believe he was talking about me, the licensing attorney.
He was quoting my post so I assumed he was refering to me.

Too many attorneys in this thread.


Nonono ... he was talking to me, the Internet lawyer.

lindylady said: Since day care is a buisness you might check your zoning is it zoned to allow for a buisness such as a day care?Sonme HOA forbids daycare..

http://www.king5.com/news/local/Neighborhood-Bans-Home-Daycare-8...

civ2k1 said:

Nonono ... he was talking to me, the Internet lawyer.


Everybody is a lawyer on the internet. Just like everybody is "attractive" on the internet.

I'm sorry for the hijack, but I thank God everyday that I'm actually a lawyer -- if only because I never have to use that disgusting acronym, IANAL. The first time I saw that and didn't know what it stood for, I threw up in my mouth a little.


Okay...back to the thread.

SoSiouxme said: civ2k1 said:

Nonono ... he was talking to me, the Internet lawyer.


Everybody is a lawyer on the internet. Just like everybody is "attractive" on the internet.

I'm sorry for the hijack, but I thank God everyday that I'm actually a lawyer -- if only because I never have to use that disgusting acronym, IANAL. The first time I saw that and didn't know what it stood for, I threw up in my mouth a little.


I'm the first male supermodel internet lawyer.

I'm going to start a new acronym: IJAIL (I'm Just An Internet Lawyer) ... is that better? A little less to clean up after yourself?

civ2k1 said: ]
I'm going to start a new acronym: IJAIL (I'm Just An Internet Lawyer) ... is that better? A little less to clean up after yourself?
So then would my acronym be INJAIL?

SUCKISSTAPLES said: civ2k1 said: ]
I'm going to start a new acronym: IJAIL (I'm Just An Internet Lawyer) ... is that better? A little less to clean up after yourself?
So then would my acronym be INJAIL?


Yup - that's where all the REAL lawyers belong

Check your homeowner's insurance coverage. My policy specifically has NO liability for home day care business and LIMITED property coverage for home day care business. However, this endorsement is specific to "the insured" (me) - so I have no idea how it would apply to a tenant. I'm assuming you already have proper insurance for your rental unit? Or, as some people have asked, are you really renting out a part of your single family home?

So CA lawyers, are you saying that not only does CA law deny landlords the right to decide whether or not there will be a daycare center on their property (unless they manufacture a reason to deny the application or fail the state licensing), but the State of California also operates as an insurer for in-home daycare centers? I'd be surprised if any other states in the country have such laws.

I feel pretty horrible now, but I called my friends and told them that it's not a good idea. In process I learned yet again how little rights landlords have in CA especially.

lousygolfer said: So CA lawyers, are you saying that not only does CA law deny landlords the right to decide whether or not there will be a daycare center on their property (unless they manufacture a reason to deny the application or fail the state licensing), but the State of California also operates as an insurer for in-home daycare centers? I'd be surprised if any other states in the country have such laws.

The State of California does not act as the insurer per se, however, the current court system in play in the United States, and particularly in California, makes it lucrative to go after the deep pocket, so if the licensees are otherwise "judgment proof," a wronged plaintiff will go after the state licensing agency. Essentially, the State, as the licensing agency becomes the de facto insurer when a licensee screws up and the state licensing agency was negligent in their enforcement of the regulations and this failure to regulate was the cause of the licensee's screw up.

If the licensee's negligence was not foreseeable (i.e. fell outside the scope of the regulatory scheme), then the State would not be liable.

This is really a first year torts concept. But since INJAIL (see supra), I'll break it down for you.

And CA law does not deny landlords the right to decide whether or not there will be a day care center -- we are talking about family child care homes. Child day care centers fall under a whole other statutory/regulatory scheme and are regulated more like a business than a social services function.

I would raise the rent if this is not yet locked in stone. My reasoning is the higher wear and tear on the proprty. Some rental agreement clause should make the tenant liable for damage caused by the kiddos. The extra property damage risk is a concern.
I applaud the prospective tenant for being honest and telling you up front. You might consider an incentive program. IF damages and repairs do not exceed $YYYY.00 over the time of the rental, you may rebate some of the extra rent.
My advice is not legal advice, simply good business.

lousygolfer said: So CA lawyers, are you saying that not only does CA law deny landlords the right to decide whether or not there will be a daycare center on their property (unless they manufacture a reason to deny the application or fail the state licensing), but the State of California also operates as an insurer for in-home daycare centers? I'd be surprised if any other states in the country have such laws.

CA denies the landlord's right to refuse a properly licensed and compliant home day care on their property. I wouldn't necessarily say that CA acts as an insurer. But it does prohibit the landlord from requiring the tenant to pay for appropriate insurance that would cover the landlord in case of a suit. I provided links to supporting documents in my posts at the beginning of the thread.

Skipping 13 Messages...
SoSiouxme said: drieendertig said:

Could he ask the parents to release him from any premises liability he would otherwise have as landlord?


Not likely such a release would be effective. Besides, so long as the landlord did not hold himself open as a licensee of the day care, he's not legally responsible for the negligence of the day care providers. The only liability I would see is if a child injured himself/herself as a result of the dangerous conditions being maintained by the landlord. So if the tenants said "Gosh Landlord, I smell gas in the house. There may be a leak," and Landlord ignored this and the place blows up, yeah, there might be liability - but this would be true whether there was a day care or not.

I think the liability issues are way overblown. Fact is thousands of family child care homes operate in the state out of rental properties. When there is a law suit, they go after the State of California or IF the licensees are homeowners, they may go after the homeowners' policies.

In a lot of these family child care homes in lower-income neighborhoods where the homes are rentals, many of the licensees are "judgment proof." Something to think about when you deciding who is going to watch your kid while you are at work.


Yeah, but certainly there's going to be higher liability if he's got 6-8 young children to pay for rather than just some adults.



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