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Why Landlord Should Not Let Tenant Run In-Home Daycare

While some landlords may be open to the idea of tenants running in-home daycares, they might want to think twice about allowing tenants to run in-home daycares due to various risk factors:

Liability Issues: If a child is injured on the property, the landlord could potentially be held liable, especially if there are safety hazards or if the property isn’t adequately maintained.

Insurance Implications: Landlords might face higher insurance premiums or difficulties obtaining coverage if the property is being used for commercial purposes like running a daycare. They may also require additional liability coverage.

Legal Compliance: Operating a daycare typically involves complying with various regulations related to health, safety, and child welfare. Landlords may be concerned about their tenants’ ability to meet these requirements and the potential legal repercussions if they fail to do so.

HOA/Condo Violation: Some homeowner associations (HOAs) and condo associations enforce rules that prohibit commercial activities, including the operation of daycare facilities, within their properties.

Neighbor Disputes: Even if the association allows a daycare operation, home daycares can sometimes lead to noise complaints or disputes with neighbors due to increased traffic, parking issues, or disturbances caused by children playing outside.

Potential Property Damage: Running a daycare can involve increased wear and tear on the property, including furniture, carpets, and appliances. There’s also a risk of spills, accidents, and damage from children playing indoors.

In addition to the risk factors above, using a residential rental for non-residential purpose is a lease violations. According to Section 10 of the NVAR Lease – NVAR Form K1354:

10. USES. Tenant will use Premises solely as a single-family residence for only those persons listed on Application and those children born, adopted, or placed under the legal care of Tenant hereafter. […] Tenant will not use nor allow Premises to be used for any disorderly or unlawful purposes and will comply with all applicable laws, ordinances, and rules and regulations of Landlord and the Association (as hereinafter defined). Lease may be terminated at the option of Landlord in case of any nuisance, excessive noise, disturbance, or conduct that, in the opinion of Landlord, is offensive to any other tenant or occupant of the building or neighborhood. …

Allowing a tenant to operate an in-home daycare poses numerous legal and liability risks for landlords, with no upside benefits. It’s strongly advised to deny any tenant seeking to operate a daycare from your property and to promptly address the situation if you discover an existing tenant operating an unauthorized daycare.

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