If you own and/or manage rental property in California you MUST allow your tenant to run a licensed day care business providing they abide by a few rules.
Rule No. 1: Make the tenant show you their Day Care License. It must be current and should state the size allowed, either up to 8 children (small day care) or up to 12 children (large day care).
Rule No. 2: The day care must do one of three things: If they carry liability insurance you can demand that they name the owner and property manager as additional insured, OR they must carry a bond in the amount of $300,000.00, OR they must have every client sign an affadavit that demonstrates that the parents have been informed that the Day Care Owner (tenant) does not carry liability insurance or a bond.
Rule No. 3: The security deposit can be increased to the maximum allowed by law. In California, this would be two times the monthly rent.
NEVER refuse to rent to a prospective resident because they inform you that they are intending to run a day care. If they do, tell them the above rules and qualify them as you normally would.
Robert A. Machado, CPM, MPM
HomePointe Property Management
Sacramento, Yolo, El Dorado, and Place Counties
We manage residential and commercial property.
916-429-1205 x 105
rmachado@HomePointe.com
Wow, I would have thought that running a business out of a residential building would be against zoning. Wonder how the neighbors must feel about that and the added traffic? Good to know if you are a landlord in California.
Thanks so much! I've been looking for an answer. Great post!
This is excellent information for opwners of rental property in California.
Hi,
Could you please provide the law (California Civil Code) on this ?
I am out of my office and will try to do so by month end. Sorry for the delay. You could try to google it or go to CAANET.org and see if you can find it there.