Family Child Care Homes in Rental Property in California

Updated 6/19/24

Did you know that one-third of California children cared for in a licensed setting are in family child care homes? This makes family child care an important source for parents looking for a home-like atmosphere, flexible hours and the convenience of location. This also makes it important for landlords to understand the legal bases of renting to a family child care provider.

A state-issued licensed person who cares for a small number of children in their home is a “family child care provider” and the home they either own or rent is a “family child care home.”

The first thing landlords need to know is that these providers are regulated and must comply with health and safety standards and because of their importance, California has passed several laws that protect their right to provide their service in rental property. Below, we will go over 8 important points that both landlords and providers should know.

Can you run a daycare in a rental home in california? Yes, you can if you meet certain criteria.

Landlords cannot deny licensed family child care providers their right to service

Landlords cannot stop providers from providing family child care services on rental property, according to Section 1597.40 of the Health and Safety Code. Providers with a small family child care license can care for up to 6 children and up to 12 in case of a large family child care license. The code also states that providers can operate in any type of rental dwelling regardless if it is an apartment, condo or single-family home.

This is also true in cases where the lease explicitly states “no businesses” or “no commercial use.” Section 1597.40(b) of the Health and Safety Code states that such clauses are void if the landlord tries to use them to stop providers from operating a licensed family child care home. Something worth adding to this thought is that the same section of the code also prohibits landlords from limiting the hours that care can be provided, should the provider need to operate in the evening or on weekends.

Landlords can limit the number of children providers can care for

A small family child care provider license lets providers care for up to 8 children if and when providers abide by certain conditions. Caring for more than 6, however, requires writing permission from the landlord.

Similarly, a provider with a large family child care license can care for up to 14 children but will need written permission from the landlord to care for more than 12. Landlords have the option of providing or not providing this additional permission.

Family child care providers must tell the landlord about their family child care home

The same law that prohibits landlords from denying providers their right to service requires providers to inform their landlord that they are operating or plan to operate a family child care home. This is true even if it’s just one child or the maximum permitted by law.

If the provider plans on operating a family child care home, they must tell the landlord 30 days before they start providing service. If the provider is already operating and is planning on moving to a new rental, it is best they seek advice from their licensing analyst since it might take less than 30 days to transfer their license to the new location and thus the notice time required can be shortened.

Additionally, providers must give landlords written notice that they are still operating their family child care home at the time they renew their license.

Providing family child care is no ground for eviction

Landlords cannot evict providers because they run a family child care home. Landlords can, however, still exercise their right to evict providers for violating any other parts of the lease such as not paying rent on time, etc.

If the rental is not under controlled ordinances, the landlord can also give a proper 30 day notice at the end of the lease agreement.

Landlords cannot raise rent on the grounds of renting to a family child care provider

Increasing rent because a provider operates a family child care home violates California’s Fair Housing and Employment Act because the landlord is discriminating on the basis of the provider’s source of income. Landlords can, however, raise rent for other legitimate reasons. Landlords must also keep local rent control laws in mind, if any.

Landlords can require a larger security deposit for family child care homes

According to Section 1597.40(d)(4) of the Health and Safety Code, upon the knowledge of the operation of a family child care home on a landlord’s property, he or she may charge the provider the maximum security deposit that is legal even if the landlord charges other tenants less. In California, the maximum amount a landlord can charge for security deposits is two month’s rent for an unfurnished rental unit or three for furnished.

What you should know about liability insurance

A landlord cannot impose or require providers to purchase liability insurance because the law states landlords cannot impose restrictions on family child care homes.

Homeowners’ insurance policies do not cover liability arising from family child care and would need a separate policy or endorsement for such coverage. Landlords should also keep in mind that insurance companies cannot cancel or deny renewal of their own insurance because a provider is running a family child care home. The law prohibits the insurer from doing so.

Landlords can require the provider to add him or her on their insurance policy of all of the following criteria are met:

• The provider already has or is planning on getting their own liability insurance policy.
• Landlord must ask to be added in writing.
• Landlord must pay any additional premiums due to being added to the policy.

Additional tips and recommendations for both landlords and family child care providers

Landlords

Family child care providers tend to be very good tenants. The provider requires regular supervision to keep their license and also must meet health and safety standards. It is a good idea to familiarize yourself with this service as it could highly benefit you in the long run since providers tend to rent for long periods of time when all the conditions are right. Here are some things you can keep in mind:

• Children are unlikely to be unsupervised in family child care.
• Traffic shouldn’t be a problem since it is only a small amount of children and are dropped off and picked up at various times of the day.
• Increased utilities are very unlikely since children are not bathed or prepared meals while in care.
• The provider is also selling a service, so it is very likely that the premises will be kept clean and organized so that they can retain more children.

Providers

If providers experience a hesitant landlord, take the time to explain how the program works. You can ask the landlord questions about their concerns. One of the biggest concerns is the noise and craziness that can be caused by children. Calmly explain that the number of children is limited and offer the following:

• You can keep the children indoors during certain hours such as early morning and late afternoons.
• You will make extra efforts to conserve energy and utilities.

Completely understating the bases of the law regarding family child care homes will eliminate any tensions or awkward confrontations between landlord and tenant. We hope this article has been informative; if you should have any additional questions, don’t hesitate to give us a call.