BILL ANALYSIS
SENATE HEALTH AND HUMAN SERVICES
COMMITTEE ANALYSIS
Senator Diane E. Watson, Chairperson
BILL NO: SB 1695
AUTHOR: Kopp
AMENDED: April 30, 1996 in Senate
HEARING DATE: May 8, 1996
FISCAL: Non-Fiscal
CONSULTANT:
Dektar
SUBJECT
Family Day Care Homes: Security Deposit and Property Owner
Notice
INTENT
The intent of this bill is to give the owner of a rental
property prior notice of the operation of a family day care
home on their premises and the ability to charge a larger
security deposit for tenants operating family day care
homes on the rental property than can be charged for other
tenants.
ABSTRACT
Current law states legislative intent that family day care
homes for children be situated in normal residential
surroundings in order to give children the home environment
which is conducive to healthy and safe development. Law
states that this policy is of statewide concern, and
supersedes municipal zoning, building, and fire code
regulations
Current law defines a family day care home as a home which
regularly provides care, protection, and supervision of 12
or fewer children, in the provideros own home, for periods
of less than 24 hours a day. A small family day care
provides family day care to six or fewer children,
including children under 10 years old who reside in the
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home, and large family day care homes are licensed for 7-12
children, with one assistant required to be present at all
times.
Current law requires family day care homes to be licensed
and have liability insurance or have parents sign a waiver.
Prior to licensure, providers must attend an orientation
by DSS on the rules and regulations, the scope of operation
of a child day care facility, and the responsibility
entailed in operating a facility.
Current law prohibits written restrictions on the
conveyance, encumbrance, leasing, or mortgaging of real
property for use or occupancy as a family day care home for
children. If written agreements do so, they are void.
This bill stipulates that nothing shall be construed to
prohibit an owner of residential
property from requiring a tenant, who uses or intends to
use the premises to conduct a family day care home
business, to notify the owner in writing 30 days prior to
commencing the business. This bill also expands a section
of the Civil Code, which permits landlords to charge up to
two months rent as a security deposit, to allow landlords
to charge up to four months security deposit for family day
care homes.
FISCAL IMPACT
Unknown. The fiscal burden would probably initially fall
on family day care home businesses.
BACKGROUND AND DISCUSSION
Characteristics of Supply
As of December, 1995 there were 42,367 licensed family day
care homes in California with a total capacity of
322,063 children.
According to the Department of Social Services (DSS), the
number of licensed family day care homes has dropped by
about 7,000 since 1991.
Child care experts estimate that:
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family day care is a critical source of infant care;
approximately 50% of family day care homes are operated
out of rental housing
three quarters of the facilities are small family day
care homes.
California has a child care shortage of about one million
spaces. Should federal block grants pass, with
stringent work requirements, Californiaos need for
child care spaces will be compounded.
Protections Which Exist Under Current Law for Landlords
Property owners or homeowners associations can request
to be included in liability insurance if the family
day care home carries insurance and any additional
premium is paid by the owner of the property or the
homeownerso association.
Family Day Care homes must be licensed before they
begin operation by the State Department of Social
Services (DSS). DSS does not have data on the
number of large family day care homes operated out
of apartments, which is one concern of landlords
(in that the number of children would be beyond a
normal family size), but if large family day care
homes are licensed in apartments they would need to
meet DSS licensing regulations, and have a fire
safety clearance. Licenses are given for three
year periods.
Protections Which Exist for Family Day Care
Insurance Code Section 676.1 prohibits the arbitrary
cancellation of a policy of homeowneros insurance
solely on the basis that the policyholder has a
license to operate a family day care home at the
insured location.
Current law provides that landlords cannot restrict the
operation of a family day care home on their
property by written instruments, or other measures.
The State has previously made a clear statement that
the availability of family day care homes is of
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state interest.
Proponents and Opponents Arguments
Proponents argue that their principal concerns about family
day care homes on rental property are the landlordos
lack of control over family day care homes, wear and
tear on buildings inappropriate for use as family day
care, and increased liability. Written notice would
give landlords a chance to deal with increased
liability issues, by purchasing liability insurance,
for instance.
Opponents are concerned that: landlords will use written
notice of family day care home operation to
discriminate against them; four months security deposit
before the operation of the family day care home
commences will be prohibitive for operators; and that a
decrease in the opportunity to establish and run family
day care homes is not only detrimental to children in
need of supervised care, but to providers who depend on
this form of relatively low-compensated employment (the
net average income nationally is $8,999 a year) for
their livelihood. They also argue that family day care
home operators, because of Department of Social
Services licensing site visits and the need to attract
and retain children and staff in their home, are more
likely than other tenants to have well-maintained
rental property. Proponents have not documented
excessive property damage from family day care homes as
opposed to property damage from non-family day care
home operating tenants.
Recent Family Day Care Home Legislation
SB 265 (OoConnell), chaptered on March 20, 1996 (Chp. 18),
recently expanded the existing capacity for family day
care homes by two school aged children. This bill will
take effect statewide in January, 1997, after three
years of being tested as a pilot in Ventura, Placer,
Fresno, San Diego, and San Luis Obispo counties.
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This is one of several bills in the Legislature this year
related to family day care homes.
AB 1484 (Martinez), currently in the Senate Health and
Human Services Committee, would allow the owner of
property in which rented or leased space is used to
operate a family day care home, to require the provider
to maintain either liability insurance or a bond.
AB 606 (Richter) would allow homeowneros associations to
require family day care homes to maintain and pay for
liability insurance, including insurance for the
homeowneros association.
Questions:
How pervasive are the problems which landlords have
encountered with family day care homes? It is likely
that some apartment units were not built to accommodate
12 people, but before large family day care homes are
licensed, DSS presumably has made the determination that
they are structurally able to accommodate a large family
day care home. In addition, the majority of family day
care homes are small.
The state has a well documented shortage of child care.
Block grants of welfare programs in the near future are
possible and potential stringent work requirements would
cause a sharp increase in demand for child care. Does
this bill have the potential to suppress the supply of
child care at a time when very likely it will be in much
greater demand? Four months security deposit could
consume one third of the typical provideros income of
$8,999; the 1994 HUD Fair Market Rent for a one bedroom
apartment was $635 per month.
POSITIONS
Support: California Apartment Association (sponsor)
San Francisco Apartment Association
Oppose: California Federation of Family Day Care
Child Care Law Center
Child Care Law Project of Public Counsel
City of Davis Parks and Community Services
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DC Insurance Services
Family Day Care Association of California
River Child Care Services
San Diego County Family Day Care Association
San Francisco Parent Voices
14 Individuals
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