Landlord wants day care ban

Q: I own and manage a small apartment complex. I'd prefer not to have tenants running day care operations. I've allowed it before, but the noise and comings and goings of the children and the parents were disruptive; and I'm worried about my liability if someone is injured. Can I specify that this type of home business will not be allowed? --Janice C.

A: In a few states, including California and New York, a landlord's attempt to prevent home day care operations on rental property would be illegal. In those states, the legislatures and courts have concluded that society as a whole has too much to lose, in the way of affordable, quality care for its children, if landlords are allowed to prevent home day care. But the majority of states have not reached that conclusion.

That's not the end of the question, however. Depending on how the courts of your state have approached the question (if they have at all), you might be on thin ice if you try to implement such a policy. That's because under federal law, landlords can get into trouble if they establish a policy that has the effect of discriminating against a protected class, even if they didn't intend to discriminate. In this context, tenants have successfully argued that a policy barring day care has the effect of discriminating against families (the assumption is that families are likely to be the ones who will want to run such operations) and women (again, the assumption is that women, more than men, will seek to run a day care center).

To escape a finding that you have indirectly discriminated, in most states you'd have to convince a judge or jury that this policy is necessary to the operation of your business, and that no feasible alternative policies can be implemented to achieve the goals you seek, without a discriminatory impact.

Trying to justify your policy under this standard could be tough. If you find that the drop-offs and deliveries are causing problems, you could probably find ways to address them. For example, perhaps you could set aside a place for parents to park that's not in the way of your other tenants. You could limit parking time to minimize congestion. You could work with your providers to make sure children don't run wild or otherwise disturb other tenants (but the sound of children playing during the day is not something you can forbid). And you can check into the issue of liability by finding out whether the day care licensing laws of your state require providers to carry insurance (many do). You should also check with your own insurance carrier to make sure you're covered. You might be able to ask the center to reimburse you for any additional premium you might need to pay to obtain a policy or rider that will cover incidents at the center. ...CONTINUED

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