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I am renting out my property. One of the interested tenant want to apply for it, but she want to know if I can give a permission to operate a family child care center out of my property. She like to transfer Liability insurance to the subject property and she like to have that covered in her name. I like to know any legal issues if I rent my house to them, any pro and con?
Right now she is in the process of applying for a family child care license with the state of MD.

8 Thoughts on Tenant want to run a child care center in my rental property?
  1. Reply
    Who Am I?
    May 30, 2013 at 2:22 am

    You aren’t renting out commercial property. They may need a special permit. You may need extra insurance. Kids cause damage. Neighbours may not be amused.
    My opinion only…don’t do it!

  2. Reply
    May 30, 2013 at 2:30 am

    Is the property zoned for this type of business? Also the health department will have to look it over to see if it qualifies to be used for that type of business as well. The property will most likely encounter a fair amount of damage with all of those kids in it every day. I would think this over very carefully before going through with it.

  3. Reply
    May 30, 2013 at 2:37 am

    if in a ‘house’ not apartment, the state will mandate
    multiple things for her to do including insurance.

    Liability insurance will be hers not yours.
    do check with your insurance company
    about their issues b4 saying yes.

  4. Reply
    Glenn S
    May 30, 2013 at 3:01 am

    Make sure that the tenant has at least $ 2,000,000 of liability insurance and to name you as “additionally insured” in the tenants policy. The tenant’s insurance company can provide you with a certificate saying that you are “additionally insured” and will sent you a notification if the tenant lets the policy lapse. Also in your lease have verbage stating that the tenant shall “hold you harmless” in any liability lawsuit that should arise.

    Also you having the certificate from the tenant’s insurance company can lower your policy cost.

    In addition, understand that the wear and tear on your property could be excessive.

    Make sure that the tenant is a licensed day-care provider. How many kids will she be licensed to take care of? I would put a limit on the number.

    I would make the lease at least a 3 year term since this is a business.
    In my state a child care facility can be in any residential zoned property…..but the premises must be inspected and approve by the city or government agency that issues the license.

  5. Reply
    Guess Who
    May 30, 2013 at 4:00 am

    No, way would I allow it.

    1. Check out your local zoning. Commercial business may not be allowed.
    2. When it comes to licensing a day care operation, in most states only the property is licensed. The provider doesn’t necessarily need to be licensed.
    2. She cannot insure the property in her name. She has no financial interest in a property that she doesn’t own. Any claims would most likely be denied. The property owner WILL be liable.

    3. DO NOT rent to her if you choose to anyway unless you have consulted with an attorney.

    Good luck

  6. Reply
    May 30, 2013 at 4:22 am

    No, no, no
    She gets her own insurance
    And she signs a Hold Harmless for herself
    And you check whether her your insurance will permit this, plus local zoning

  7. Reply
    May 30, 2013 at 4:52 am

    You have to find out if you are zoned for commercial use. I wouldnt do it.

  8. Reply
    ibu guru
    May 30, 2013 at 5:22 am

    Absolutely NOT! Do NOT allow. Legal liability to you if any child injured or anything else. As owner, you will be sued, whether there’s insurance by tenant or not. And you are definitely jeopardizing your own insurance. Absolutely do not allow this, no matter how hard this prospect tries to con you into it.

    Do not rent to this prospective tenant now since you know she cannot afford it, and intends to run biz out of your property.

    Now, next let’s address the zoning issues . . . or do you want to start with tax issues next? Or . . . ?

    How much trouble can you get into in how many different ways? You could not possibly want to know. Don’t even think about it! Kill off this bad idea this instant.

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