Tenants running family daycare business

Hi investors,

Any one had experience having tenants running a daycare business on your property?

Pros and cons? Any implications?

Thanks!

 

Depends what sort of daycare business. A home one? A purpose built building? Some other format? Number of kids?

 

It's a family daycare in normal house with only few kids.

 

Might pay to have a read of your insurance policy about
businesses being run from the property ,and there is a long list of what can go wrong very quickly apart from the local authorities parking entry..

 

if I have a residential house, I rent it to people to use it as a home.

I would not rent a residential home to someone who wants to run a business.

 

Most councils allow this
It's usually a stay at home carer with their own child, they then look after a few other kids in addition (don't quote me, but it's like 3 extra kids or some such)

 

Council may also allow a mechanical business, that does not mean the tenant can have at it & I would not rent to them, that is just me. No business, it is a home

 

I'm not sure you can actually stop a tenant from doing this. I'd have to look into it.

 

Check the standard T&C's in the lease, in Qld for example it says this, you could try your luck at xCAT getting an order to have them stop or try and terminate the lease if the T&C's and/or Special T&C's in your lease give you grounds, perhaps...

 

Home businesses are probably still mostly being used as a place of residence.

 

I have a bit of experience from the licensee (administrator) side, not as landlord. They can be a very profitable business for the educator. A lot of compliance required, including ensuring the premises are safe for use (safety glass etc), blue cards.

 

I've had several sets of tenants do this in our places at Slacks Creek, usually without asking permission. I have a suspicion there is an element of welfare fraud associated with it, that the care isn't always happening but the child care benefits/rebates are being claimed.

I have found a few issues, mainly wear and tear on the house from a huge stream of generally preschool aged kids running though the place. Dirty walls, soiled carpets, fingers getting pushed through flyscreen, broken taps/towel racks/toilet roll roll holders, toys in the yard, on the roof etc.

It makes me uneasy from a liability perspective as well, so I have now started including a special clause in the lease that the house is not permitted to be used as a home daycare. Is this clause enforceable? I don't know but since I have started specifically highlighting it at the start of a tenancy it hasn't happened again.

 

Running home businesses is not an issue at all as long as you're both appropriately insured and it's permissible with council (i.e. number of people coming/going, staff, parking, etc.).

I've had a few over the years run family daycare, usually in older homes where the owner isn't too worried about kiddos running around having fun and chipping the walls, haven't had any problems with the business component itself. Definitely check your insurance though- I found some insurers wont cover you.

 

Check with your insurance company, particularly the liability issue if a child in care is injured. You can be sued as well as the child care provider.

 

Yes, this! It's only a few kids. We used family day care for Lil before she was old enough to go to the daycare centre that our other child went to, back when they were babes, and we worked.

 

any visitor to your property can potentially sue you if they get injured. The more visitors there are the greater the risk and there is a greater risk still with young kids due to their activeness. Because a business is being operated there will be no insurance coverage for this either unless you have a specific policy covering it. Even then the insurance may not cover all things that could potentially happen.

 

I would, as owner, ask council, and your insurer. There could be other liability issues if a fire occurs, glass breaks, strangulation from cords and much more.

In my LGA council says
Development Consent is not required for the operation of home based child care. However, a written submission detailing the proposed service together with an assessment fee in accordance with the adopted fees and charges is required. AND They require that the educator is registered as a education provider according to Children (Education and Care Services) National Law (NSW).

 

My mother used to do family day care when I was a child /teen. The houses we lived in were rentals. She needed written permission from the landlord and her own public liability insurance in place.

This was more years ago then I would probably like to admit. And was located in NSW. Each state has it's own regulations about what is required in terms of insurance, safety measures, and such, in order to legally operate. They are a lot stricter and more regulated nowadays. Definitely in ACT and NSW (I have close friends that do it in their own houses in these states). Not entirely certain of the requirements down in VIC.
They often need to make minor modifications to the house to ensure they meet safety requirements (ie child safety gates, furniture secured to walls, etc).

It would depend on the individual tenant and the property in question as to whether or not I would allow permission in one of my properties. I would be requiring evidence of their insurance, any modifications to be approved first and done at their cost (as well as removal and restoration if required when they leave), etc.

But a lot of the potential modifications I would probably consider allowing if a tenant with a young child requested anyone, with similar terms. Child safety is important, and if the modifications are done properly, and the place restored upon removal (or sometimes left in place for future tenants), then I think it us reasonable to allow.

 

It may be a bit grey, but I would not knowingly rent a home to someone who is running an actual business.

Anyone who does it on the sly once in would not be seen as a good tenant.

And, if you want to turn my residential property into a commercial facility, then, pay for it accordingly and with similar conditions would be my request, which, no doubt none would like.

Essentially, this is a renter asking me to foot the extra costs and risks of their business ! No way hosay. I want a normal average person/s seeking a home.

This sort of activity should be outlawed without...

A) Specific consent sought and approved by owner
B) All other normal business requirements and insurances that also indemnify the owner
C) Some extra compensation and mechanism to bring it into line with commercial premises, such as person needs to re model at vacate, pay all outgoings etc

Also, as other points out, you may be aiding in fraud, while not much you can do, this is already a problem where people keep others off leases etc because they all claim single parents pension while having permanent partners or sub letting. It is rife in my experience.

Buy your own darn place if you want to run a business !

 

I've had this in one of my rentals. No issues.
A family daycare is not like those big daycare places that have 30-50 children.
This is usually a stay at home parent looks after 5 children or so.
The person also lives in the house as well, so no different to say 2-3 of your friends asking you to mind their children for a 7 hours.

There are rules they need to adhere, but nothing that cost me anything.
Wear and tear was ok for me, but the house was new and on the condition report, everything was excellent. When the tenants moved out, just made them repaint the place - which was a condition of me agreeing to allow to begin with.