Law Offices of Heist, Weisse, and Wolk, P.A.
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Most managers prohibit a resident from conducting business in the residential unit. In most cases the lease clearly states or should state that the premises are to be used only for residential purposes, and that commercial activity is prohibited. It is usually clear when commercial activity begins to occur in a residential unit, as customers will be showing up, traffic in and out of the unit will increase, and the resident may be so bold as to advertise his or her services or products using the address of the residential unit. What about babysitting? Is this a commercial activity? While many people love children, it is doubtful that an individual will voluntarily take on the responsibility of watching another person’s child or children on a regular basis for no compensation.

Babysitting and Daycare Services

In both apartment communities, babysitting and daycare services are being conducted for compensation. It starts out with one child, and then the babysitter begins to realize that more money can be made by watching more children, and soon you have a unit full of children with their parents or guardians dropping the child off and picking the child up. Money is exchanged, and often this is “under the table” or cash. Seems harmless enough right? Wrong. What is occurring here is a commercial activity on a residential property. This is a lease violation and may or may not be a violation of law.

Legal Daycare Services in a Residential Home

Many counties and municipalities actually allow small scale day care services to operate legally and with a permit in a completely residential area. In response to the need for affordable child care or child watching, these activities are in many cases permitted with some limits, but often without many regulations. Do you want to allow a resident to conduct a babysitting or daycare service in the apartment? ABSOLUTELY NOT.

The Liability

Massive liability to both the caregiver and the owner of the premises can be created in the care of children. Now you may wonder why a daycare center would ever operate at all. Simple. Insurance. A legitimate daycare or babysitting service will have liability insurance to cover just about anything that could occur that may cause the injury or death of the child. Not only will the business be carrying insurance, but the property owner, if separate from the business owner, will also be carrying insurance, and the insurance company will be put on notice as to what type of business is being conducted on the premises. Everything is disclosed, proper permits and licensing are in place, and the insurance is tailored to the activity which is being conducted on the premises.

The “No Insurance” Problem

In many cases of babysitting or small scale daycare services, these activities are occurring in the residential unit with no license, no permission from the manager and NO INSURANCE. The property owner may have the normal liability insurance coverage, but you can rest assured that this insurance does NOT cover a business being conducted on the premises, and in the event there is a claim, the insurance company will fight all the way to prove that they did not cover commercial activity on the residential premises.

What “Bad” Things Can Happen?

We have seen cases in which children have nearly drowned in the pool of the babysitter’s home, been molested by a boyfriend of the babysitting resident, overdosed on medicines the child found in the babysitter’s medicine cabinet, and most recently a situation in which a child climbed on a table near a window and fell three stories to the ground below. As you can see, the potential dangers are limitless. Is the manager liable? Possibly, especially if the manager had knowledge that the babysitting was occurring on the premises.

Did the Manager Have Knowledge That Babysitting Was Occurring?

Whether or not the manager had knowledge that babysitting was occurring on the premises can be a crucial factor in whether the manager can be held liable for the injury or death suffered by a child, or whether the insurance carrier will in fact cover a potential claim. Some of our clients actually have knowledge that babysitting is occurring on the premises, because they have personally observed it, and some have even encouraged it! Recently while giving an in-house legal class, we observed a number of notices on the community bulletin board in the clubhouse where residents were advertising their services for babysitting on the premises. This knowledge by the manager and the failure to act swiftly to stop the activity can result in serious liability to the manager.

You Discover Babysitting, Now What?

If a manager is made aware that babysitting and or daycare type activities are occurring on the premises, the resident needs to be immediately served with a Seven Day Notice of Noncompliance With Opportunity to Cure, which your attorney will assist in drawing up for you. Follow-up is crucial, and it needs to be determined if the activity has stopped or is still occurring. There is nothing wrong with observing the premises and asking a parent if in fact the resident is babysitting their child. If you observe children and parents coming and going on a regular basis, it can be safely assumed that babysitting and or daycare is occurring. This assumption will not be enough for termination and eviction, so we recommend that you document the unit carefully, and if necessary, take video surveillance of the entrance to the premises. If you feel that the authorities need to be notified that an illegal daycare or babysitting service is occurring, reporting and follow-up is crucial.

Fair Housing Considerations

You must have a written policy regarding babysitting and a strong clause in your lease prohibiting such activity, but you do not want to be accused of familial status discrimination. We recommend that you post a sign in the common area clearly stating that no commercial activity is permitted on the premises, and that this includes running a daycare or babysitting service. Monitor the community bulletin board regularly, as this is where advertisements for babysitting frequently occur. A resident could say that you are preventing their child from having friends come over to play, or that you are trying to only have residents who have no children. You will need to counter such accusations by clear proof that the resident was actively engaged in babysitting on the premises, and better yet, be able to prove that the resident was receiving compensation for doing so.

You suspect your resident is engaged in babysitting or running a daycare service? Call your attorney as soon as possible.



  • The Curable Noncompliance Examined PART 1