Day Care and Rental Property

California law requires residential landlords to allow small day care providers to operate on residential rental property under certain conditions. To operate legally in residential rental property without the permission or consent of the rental owner, the day care must be limited to six children or less. The children of the day care provider count in that number. The number can be extended up to a total of eight but only if the rental owner consents to the increased number.

The rental owner can require the day care provider to increase the security deposit to the maximum allowed by law, which currently is twice the monthly rent for an unfurnished unit and, three times the monthly rent for a furnished unit.  The rental owner can flatly refuse to rent to a large day care provider or require any conditions of operation the owner deems necessary.

The day care provider must be licensed by the state Department of Social Services (DSS) and give the lessor thirty days written notice of their intent to conduct this activity on the property. For premises liability reasons, a landlord should take extra precautions to limit or minimize any dangerous conditions on the property once notified of the intent to operate a day care business.

CA Health and Safety Code §1597.531 requires each licensed provider to obtain liability insurance or a bond, or to obtain an affidavit from each parent stating that he/she has been informed that the property owner’s insurance may not cover losses in connection with the day care operation, unless those losses are caused by, or result from, an action or omission by the owner. If the day care provider has insurance, the landlord may request, in writing, to be added as an additional, named insured on the policy, as long as it does not result in cancellation.

For more questions, please contact Tri-Valley Management at 925-290-8143