tenants childminding issues?

PasseySam

Hi,

We are currently looking to rent out our property and have received an application from prospective tenants.

The tenant is a self-employed childminder and wishes to do the childminding from the house. They have passed the referencing process but I am unsure about what issues could be involved with having tenants effectively running a business from our home.

I have contacted our mortgage lender and landlords insurance company to ask about potential clauses or problems with them about this, but I was wondering if there were any fellow landlords out there who may be able to offer advice on what other issues we should address?

I am also contacting our letting agent to enquire about any clauses in the tenancy agreement the may relate to running a business from home.

Mainly I'm concerned about additional wear and tear on the property from having many children there above what would be considered normal for a professional couple or small family and am not sure what we can do to cover ourselves for this? I am not trying to discriminate against larger families or people running home business or anything, but we have spent a lot of time and money making our home as we like it and want to make sure we're covered against any additional damage or excessive wear that may occur from the childminding but am not sure what there is we can do?

Also, can anyone point me in the direction of information or give any advice as to what modifications, if any, would need to be made to the house to meet safety requirements of childminding?

Other than these things what else do we need to think about and does anyone have any advice on this situation?

Whilst I think it is great to have some prospective tenants and do not wish to deny anyone the chance to make an honest living, I am very cautious about making sure we do things properly and as we do not live nearby I don't want any extra hassle or problems that could be avoided.

Many thanks

MiniSis

No modifications will be needed to the house health and safety wise. As long as all relevant insurances are in place I can't see their being an issue. You make out the kids will trash your house my sister was a childminder and lived In Her house and it was kept lovely, even though she had children there all day. There is only a maximum
Amount of children minders are legally allowed (3 under 6 with 1 under 1) so no different to an average family really!!

So you can either decline the family a tenancy or go with it and not worry! Maybe charge a higher deposit or something?

david29dpo

As above.
My only experience with a self employed tenant was his work dropped off and he got way behind with his rent.
Yes, this could happen to any one in full time employment but once bitten?
Your call but me? No.

theartfullodger

As she would be running her business from home (genuinely, really, people turning up, money taken etc etc..) it will be a commercial tenancy rather than an AST EVEN IF THE PAPERWORK says AST.

£5 says your mortgage lender won't permit this. £10 says your landlord insurance won't cover it (so if little janet burns the place down no payout, you're bankrupt,.,.).

I know what I would say...

PS Don't be tempted to think "it's OK, no one will ever know..". At the fatal accident enquiry into Janet's death, reported in the local press & attended by the insurance company, it will be difficult to get everyone including Police, Fire officers & judge to lie for you ...

Cheers!

PasseySam

Thanks everyone for your helpful replies, I have been worrying about what to do on this one.

MiniSis - I don't mean to sound critical and generalise too much about what children will do to the house or to suggest that childminders will not look after the house or wilfully damage it. Just that accidents do happen and things can get broken/damaged, more children = more chance of accidents and damage so was wondering what people's thoughts were on how we can cover ourselves for this.

theartfullodger - I agree with your concerns, and I'm fairly sure our landlords insurance has a clause in about not running a business from the house, just waiting to hear back on the mortgage. Not sure I'm willing to go with a bet on these as I suspect you're right!

I was not sure whether childminding is generally considered to be a business or whether it was dependent on how many children or something?

I am not comfortable with trying to get around these issues and hope no-one notices so want to make sure that if we do agree to the tenancy then everything is done properly.

Thanks again, we're quite new to this letting thing and so really appreciate the input! If anyone has any past experience of this situation or nuggets of info to add then much appreciated! Cheers!

Bufger

PasseySam wrote: »

Thanks everyone for your helpful replies, I have been worrying about what to do on this one.

MiniSis - I don't mean to sound critical and generalise too much about what children will do to the house or to suggest that childminders will not look after the house or wilfully damage it. Just that accidents do happen and things can get broken/damaged, more children = more chance of accidents and damage so was wondering what people's thoughts were on how we can cover ourselves for this.

theartfullodger - I agree with your concerns, and I'm fairly sure our landlords insurance has a clause in about not running a business from the house, just waiting to hear back on the mortgage. Not sure I'm willing to go with a bet on these as I suspect you're right!

I was not sure whether childminding is generally considered to be a business or whether it was dependent on how many children or something?

I am not comfortable with trying to get around these issues and hope no-one notices so want to make sure that if we do agree to the tenancy then everything is done properly.

Thanks again, we're quite new to this letting thing and so really appreciate the input! If anyone has any past experience of this situation or nuggets of info to add then much appreciated! Cheers!

If you're new to letting then have a good read of this whole section of the MSE forums. There are many experienced LL and tennants here and you'll learn from other peoples experiences. There is a guide to being a good landlord you'll find around here somewhere

tbs624

MiniSis wrote: »

... As long as all relevant insurances are in place I can't see their being an issue. ........Maybe charge a higher deposit or something?

As Artful's post suggests, there *are* potential issues for a LL in this situation.

It is usual for a tenant's home let out on an AST to be used only as that -ie, for residential purposes only, not for running a business. Rules applying to commercial tenancies may come into play, which may for example mean that the T can assign the tenancy, has diffferent rights on tenancy renewal etc.

This is in addition to any clauses within the deeds, or the mortgage agreement or LL insurance policy about business use at the property.

There may also be a potential planning permission issue ( change of use) depending on which Council you come under.

OP - as an newbie you may find it helpful to have a look at RLA/NLA/LandlordLaw websites - membership of any of them is a bonafide expense which you can set against your rental income for tax purposes.

You will also find other suggestions/links on here in one of G_M's posts, which is regularly updated

MiniSis

PasseySam wrote: »

Thanks everyone for your helpful replies, I have been worrying about what to do on this one.

MiniSis - I don't mean to sound critical and generalise too much about what children will do to the house or to suggest that childminders will not look after the house or wilfully damage it. Just that accidents do happen and things can get broken/damaged, more children = more chance of accidents and damage so was wondering what people's thoughts were on how we can cover ourselves for this.

theartfullodger - I agree with your concerns, and I'm fairly sure our landlords insurance has a clause in about not running a business from the house, just waiting to hear back on the mortgage. Not sure I'm willing to go with a bet on these as I suspect you're right!

I was not sure whether childminding is generally considered to be a business or whether it was dependent on how many children or something?

I am not comfortable with trying to get around these issues and hope no-one notices so want to make sure that if we do agree to the tenancy then everything is done properly.

Thanks again, we're quite new to this letting thing and so really appreciate the input! If anyone has any past experience of this situation or nuggets of info to add then much appreciated! Cheers!

What are you concerned about getting damaged exactly? Are you letting the property unfurnished or furnished? The tenant would have insurances against damage accidental or otherwise! So if a window gets smashed its covered etc! A kid drawing on a wall can be painted over. I personally can't see much more of an issue and I do think you are worrying too much on this aspect!

jjlandlord

theartfullodger wrote: »

As she would be running her business from home (genuinely, really, people turning up, money taken etc etc..) it will be a commercial tenancy rather than an AST EVEN IF THE PAPERWORK says AST.

Not convinced.
Mostly because, in case of OP, the whole of the property remains residential and the person's principal residence, and no part of the property is used exclusively (or mostly) for business purposes.
Now, if she was planning to open a nursery and/or to employ assistants, etc. this would probably be a different story.

As for change of use, ditto. Though this should be checked with LA.

marliepanda

Perhaps irrelevant but I was faffing with my insurance on Tesco's website and for home insurance it has this clause:

"It isn't used for business other than childminding or paper work (clerical work)"

Thought it was interesting how childminding was specifically mentioned as not being included in 'business' though I am not sure what landlords insurance would say.

PasseySam

Just a bit of an update - our insurer has said that it isn't a problem as long as the tenant operates within the government regulations regarding numbers of children, is fully registered with the relevant authorities and has all the right liability insurance etc. Just waiting to see what the mortgage company says.

MiniSis - the property is being let unfurnished so it is not really specifically furniture I was thinking of. I am not suggesting that the tenants will ruin the house or the children will burn it down deliberately or anything, just that it is our home (not a buy to let property) and we have spent a lot of time and money making it just right, it is freshly decorated with new wooden flooring etc. We are only renting the house out as we are living overseas for a couple of years and it is our much-loved home. Thank-you for your comments and thoughts, the additional wear and tear is only one aspect that I am considering in this and not necessarily the main thing that I am worried about but I take your point and I agree that things can be repaired. As we are not living locally and the property is being fully managed by our letting agent I am just trying to make sure we have covered ourselves to minimise any future problems as it is not always easy to deal with problems from a distance should they arise.

It seems that the tenant would only be minding a couple of children rather than running a full blown nursery, which makes a big difference I think and may affect whether any planning permission is needed from what I understand. Our letting agent has said that a clause can be included in the tenancy agreement to the effect that we give permission for the tenant to child mind from home, with additional conditions regarding liability insurance and numbers of children etc. I'm not sure if we would need a solicitor or someone to make sure this is all done properly of if we can just have it written in but the letting agent?

I am thinking that we should also request to see a copy of the relevant liability insurance policies that the tenant would have to hold to check what is covered and that they have adequate cover.

tbs and bufger - thanks for your comments, yes I think we will need to do a bit of reading about being a landlord and I will check out the resources that you suggest. As we are only renting the house out due to moving away for work it has been a bit sudden so would be good to get some solid information. Thanks

In particular I am not clear on whether it would still be OK to have as AST in this instance as people seem to have different thoughts on whether it would be considered a commercial property or not, and whether childminding is considered to be a business in this regard. I guess I will try to look up more information whilst waiting to hear back from the mortgage lender - the decision might be out of our hands depending on what they say!

Thanks again