Tenant has an Unlicensed Daycare

[Jason Howard Marden]

We have a tenant who is running an unlicensed daycare. Do we incur any liability? There is no exclusion in our rental agreement.

[Greg M.]

Depending on your area and number of children being cared for, you may not be able to anything legally. 

Yes, there is liability there for you. You have to know that when there is a problem, people sue everyone, especially Mr. Deep Pockets Landlord. Even if a jury rules there is no liability for you, that's after you spent $100K in legal fees to fight it. May want to consider a multi-million dollar umbrella policy that will cover this type operation on your property. It'll be expensive, but better than losing everything in life you've worked for. And make sure your primary policy will protect you against this. 

You can try to get them to stop by threatening eviction. You rented the unit as a residence, not a commercial property. If the daycare violates local laws, report them ASAP. 

And get a goddamn lease that is done professionally that will protect you in these cases.