Tenant with home based childcare

[taslim03]

Hi All,

I want your advise in regards to home based childcare, on what preparation that i should do to make sure my side is covered.

History:
- I have a family tenant for more than 12 months. Very good tenant. Looks after the property very well. I want to keep them.
- The wife has a licence (NSW) to look after 5 kids at "all time" including her own. She want to look after neighborhood child and get paid / home based child care.
- I had checked my council. Zone 2b. I have a letter from council stating that the property is on Zone 2b, and allowed home based child care to serve the community but Not a child care centre. No permission from council required.
- I said to the tenant that she can do it. I stated that, she has to make sure to take insurance for her home based child care and she has to make sure her licence is current.

Note: tenant is very good, very clean, rent up to date, no dramas, always ask permission, very cooperative with the RE agent. I want to keep them.
I also had read articles, people said in this forum, Childcare association forum. It seems they contradict each other. Please help.

Because apparently i might be liable if anything goes wrong, What is the next step i should do?

- I will ask the tenant to give a copy of the business insurance and a copy of her licence to my real estate agent.
- Should i ask a solicitor for a letter saying that i am not liable if anything happen. OR can tenant produce this letter her self with witnesses ?
What else do i have to do to make sure that i have done my duty of care? So that i wouldn't be liable if anything goes wrong because i had done as much as i could.


Thank you for all your input in Advance. I Appreciate it.

Taslim

 

[Angel]

hello Taslim

You will have to talk to your LL insurance company straight away. Some insurers will not cover you at all in this situation even with a letter of indemnity from your tenant. My tenant was registered with Family Day Care Australia and a lady from there spoke to us about the insurance and registration.

When my tenant moved out earlier this year we found they had wrecked the carpets (to be expected) and had also damaged several taps and washers. Doors get slammed and drawers get broken off their runners. The water bill doubled while they ran Day Care so make sure your tenant pays for water usage. Although I was prepared for "wear and tear", it was much more than I had imagined anyone could do in only one year.

 

[Terry_w]

Because apparently i might be liable if anything goes wrong, What is the next step i should do?

Tell her she can't do it!

What if a child falls off a balcony? No letter is going to cover you for that.

 

[marg4000]

No one can sign away the rights of another person.

If a child is injured on your premises, that child has legal rights no matter what a parent may have signed.

I would never allow it.
Marg

 

[taslim03]

Hi Angel, I have spoken with my insurance. The officer said its ok. He put a record in my insurance schedule about it. They will contact me if anything else required from me. He said, so far it?s Ok. However he could not produce a letter as per my request stating that the insurance would cover if anything happen due to the home based child care. I said I need something on my hand/hard copy, and I cannot just take his word alone. I am with Vero insurance. I will find other insurance company. Not happy with the service.
Fortunately, this tenant is clean and looks after my property very well according to the inspection report. Biannually inspection. And yes, they normally pay the water usage.
---
Hi TerryW and Marg, it would be my last resort to say No. There is a big chance that they will move out if I said no. On the other hand, I am happy with this tenant.
----
I will call Family Day Care Australia to ask them about this risk.
What if the tenant has a Public Liability Insurance ?. Apparently it covers:
 $10 million Public Liability cover ($20 million available)
 $10 million Carer Errors and Omissions (Professional Indemnity) cover
 $10 million Landlords Liability cover
 $10 million Products Liability cover

Regards

Taslim

 

[Terry_w]

Ask the insurers for a list of what they won't cover.

I can recall 2 cases
1. Ripped carpet, tenant injured back.
2. tenant punched glass window cutting hand badly. Wrong kid of glass was used.

Both sued and won more than $800k, although realestate agent was partially liable for 2 as they arranged the glass to be replaced.

 

[fernfurn]

My dil does it in a rented house, mainly tiled. They have been there a year and the house is spotless (floors washed every night) absolutely no damage to the house, no knobs missing or holes in flywire or venetians out of skew. The house is perfect, just like their own one was

 

[thatbum]

Tell her she can't do it!

What if a child falls off a balcony? No letter is going to cover you for that.

I agree, all other things being equal, having your tenants doing this at your property is straight-up riskier in a legal sense.

But obviously the chance of something happening is extremely low and so the factors you described would weigh in as well. Up to you.

 

[alicudi]

Hi

I would tell your tenant they can do it.

But also inform them in writing that you were really only expecting to rent the premises out as a residential property. And as you the landlord are not the expert in child care please advise if any safety improvements need to be done that they as a professional child carer can establish and also advise on how they (the tenant) will be attending to all of these potential safety issues that are of a concern to a child carer and whilst running this type of business.

I am sure if the premises was a dedicated child care centre it would have been constructed with different child safety measures in place versus a traditional residential property. A child carer (even though they are only caring for 5 children at the most), has a standard of care and a duty of care that must be provided to all children at all times and you as a landlord cannot reasonable know what these are as it is not your expertise.

Also make sure your agent has copies of all licences and insurance policies and take note of renewal dates etc.

Regards,

alicudi

 

[jesskaye101]

I operated a successful family daycare for many years as a tenant.

If you become a member of your local family day care provider (not compulsory) you can access specific public liability insurance which specialises in this area. It is much more cost effective than trying to find private home based child care insurance. Your state child licensing board will grant you a licence but it is also important to join your local family day care association. Also provides field support, early child hood programmes, nutritional workshops etc.

I had the situation of a child in my care jumping off the verandah at the rental property I was conducting my business from and breaking her leg. My public liability insurance protects me for 25 years in the event this child some day down the line chooses to sue me (her Mother acknowledged it was an accident and had no interest in suing me at the time). This all occurred over 10 years ago and her leg healed perfectly. I no longer operate the business and the property has now changed ownership.

I guess in life the only way to guarantee that nothing ever goes wrong is to not venture out and get up to anything. As a landlord now myself I have 100% confidence that if I had the situation of a tenant wanting to conduct such a business I would be most receptive to it.

 

[taslim03]

Hi TerryW and thatbum ? I will contact Family Day Care Australia. Will ask them more info about my potential risk. I will also call Terrischeer insurance. At the moment I am with Vero insurance and not happy. Will get more info from Terrischeer - how to cover myself. I read from other somersoft ian that Terrischeer is the way to go.
---
Hi fernfurn, it sounds like my current tenant. That?s why I have this dilemma or maybe catch 22? They look after my property well.
---
Hi alicudi, I will keep your advice in mind. On the other hand I will try to personally call some organizations to find out my potential risk and weigh them. Then make a decision.
---
Hi jesskaye101, thank you for your advice. Do you mind to explain to me a bit more your first 2 paragraphs about joining local family day care and my own public liability insurance? Thank you.

 

[Terry_w]

I operated a successful family daycare for many years as a tenant.

If you become a member of your local family day care provider (not compulsory) you can access specific public liability insurance which specialises in this area. It is much more cost effective than trying to find private home based child care insurance. Your state child licensing board will grant you a licence but it is also important to join your local family day care association. Also provides field support, early child hood programmes, nutritional workshops etc.

I had the situation of a child in my care jumping off the verandah at the rental property I was conducting my business from and breaking her leg. My public liability insurance protects me for 25 years in the event this child some day down the line chooses to sue me (her Mother acknowledged it was an accident and had no interest in suing me at the time). This all occurred over 10 years ago and her leg healed perfectly. I no longer operate the business and the property has now changed ownership.

I guess in life the only way to guarantee that nothing ever goes wrong is to not venture out and get up to anything. As a landlord now myself I have 100% confidence that if I had the situation of a tenant wanting to conduct such a business I would be most receptive to it.

Good to hear a real life example.

Insurance will cover you in most situations, but there are many things it won't cover - for example if the railing on the balcony wasn't 'standard' height etc.

And I agree that we need to take risks in life.

But in this situation it is the tenant that is operating the business of which the landlord has limited control. No extra rent will be obtained so I see this as added risk for no benefit. It would be different if the landlord was buying a property with a view to run a child care centre. They could then take various asset protections strategies to protect other family assets.

 

[SeafordSunshine]

I am not a solicitor but?

I think it stops being a residential lease, subject to the relevant laws, and starts being a commercial lease?


I hope this helps,