HOA's and Daycare Centers

Question: " I bought a condo and didn't realize there was a daycare operating next door. Why doesn't the Board of my HOA shut it down?"

Health & S C § 1597.40 (c) provides that restrictions placed on homeowners within a Common Interest Development (CID) that prohibit the operation of a daycare are void. Health & S C § 1596.78 defines a Family Daycare Home as one that provides care & supervision to 14 or less children in the caregivers home for not more than 24 hours and is either a Large Family Daycare facility or Small Daycare facility.

• Large Family Daycare center; 7-14 children in the caregivers residence, which includes children under 10 that reside at the caregivers residence.
  
• Small Family Daycare center; 8 or fewer children, which includes children under 10 that reside at the caregivers residence.
  

Although a HOA may not preclude the operation of a daycare within its community by language in the Declaration the Association or its members may still be able to bring a nuisance action against the resident owners of the daycare facility for harmful or dangerous conduct. The HOA may also require the daycare provider to have proper insurance (see below), proper local and state law licensing, and ensure compliance with community rules.

In addition, Health and Safety Code §1597.531 requires a daycare provider to elect between the following options as it relates to liability coverage;

1. Carry Liability insurance covering injury to guests & clients of at least $100k per occurrence & $300K in total; or


2. A $300K Bond; or


3. The daycare can elect to not carry either of the two foregoing options and elect to create a file that contains affidavits that are signed by the parents that have children at the daycare informing the parents that the daycare does not carry insurance or a bond. (addtl requirements are required for the affidavit if the daycare provider is not the homeowner)
   

Finally, Health and Safety Code §1597.531(b) states that if the daycare provider elects either the insurance coverage or the bond then the policy must name the HOA or the owner of the property as an additional insured party if "all" of the following requirements are met;

1. The HOA Board or property owner makes a written request to be added to the policy.


2. Adding the HOA or property owner will not result in cancellation or non-renewal of the policy or bond.


3. Any additional premiums as result of adding the HOA or owners are paid by the owner or HOA.

In addition to the above requirements there may be public policy arguments why a small business should be allowed to operate within a HOA community. I plan on covering this topic in future posts.

Note: The information contained is not legal advice and does not establish an attorney-client relationship. Contact us via email Ryan.McClure.Esq@gmail.com or call us at 951.818.0687.