Applicant runs a daycare?

[Joe P.]

One of my apartments has an opening, and I have a solid applicant (family). Dad has a job, mom runs a licensed daycare and they were expecting to use the apartment to continue to do so. It obviously adds income to their bottom line and they've provided a State of NJ registration/license to operate that appears good until 2022.

Anyone aware of any laws, issues, concerns with allowing this to operate? I have boilerplate language in my leases that say you cannot operate a business, but frankly this is a business that helps the tenant with their financial situation. I'm also wondering how this might affect my insurance, or increased liability on my part, in the event things are not hunky-dory for any reason.

Would welcome other NJ landlord/owner thoughts, thanks!

[Ryan Ingram]

@Joe P.

I’m an insurance agent, I wouldn’t be a huge fan of this set up in a multi family, however, I’d probably be completely ok with it if it was one of my tenants in a single family home.

People run daycares out of their home a good bit, I wouldn’t say this is uncommon. There are a lot of insurance options out there for this both on the admitted and non admitted markets.

If you go through with this, it is imperative that you make sure they have the appropriate business insurance AND you are listed as an additional insured (not additional interest, interested party, or anything else). This will allow you coverage under their policy in the event of a claim.

I’d also require that their insurance agent send you a certificate of liability insurance on a monthly basis. The last thing you want is for the insurance to accidentally lapse for nonpayment and not have any coverage....for either party. This is seemingly excessive, but you can’t be too careful :)