Can I Forbid Tenants From Running Day Care Businesses in Their Rental Apartments?

Question

One of my tenants wants to run a small day care program out of their rental unit. Do I have the legal right to forbid this? I'm concerned about insurance and liability issues.

Answer

It depends on the location of your rental property. In some states (such as California and New York), landlords have limited ability to prohibit day care operations in their rentals.

Under California state law, for example, landlords cannot prevent tenants from using residential rental premises as licensed family day cares. (Cal. Health and Safety Code section 1597.40 (2021).) In fact, any clause you might have in your lease or rental agreement prohibiting a family day care is considered void. (Cal. Health and Safety Code section 1597.41 (2021).) To qualify as a family day care that is protected under California law, your tenant's day care must be licensed, and must meet the requirements found in the California Child Day Care Act as well as other laws and regulations. The California Department of Social Services' website contains all the details about child care licensing laws in California.

If you're not clear what the laws are about tenants' rights to have a day care in rental properties in your state, check with your state's office of consumer protection (USA.gov has contact information for all the states' consumer protection offices).

You'll also want to check your local building and zoning codes for restrictions on home-based child and day care businesses.

Finally, you should contact your insurance broker to find out about insurance issues relating to your tenant's operation of a child care business in the rental. For example, you might need to obtain a special policy to cover the potential liability that stems from a tenant's child care, and you might want to require your tenant to carry certain coverage for the child care operation.