Q: Do you have to allow residents to run a day care in rental property?
A: Depending on state law, the answer may be yes, according to a recent ruling by a court in California. Under California law, landlords generally must allow use of rental property as a “family day-care home” for six or fewer children, provided that notice is given to the property owner.
The case was filed by a couple who accused their landlord of discrimination for trying to evict them because they wanted to run a day care service at their rental home. The couple asked for a court order to prevent their eviction until their case could be resolved at trial.
Granting the request, the court ruled that the couple was likely to succeed on their discrimination claims under state and federal law. The court said the couple could pursue their claims under California fair housing law, pointing to a ruling by the state appeals court, which recognized that discrimination based on operating a family day care constitutes source-of-income discrimination; it also recognized that discrimination on that basis may have a disparate impact on women or families with children.
The court also said the couple may pursue claims under federal fair housing law. The court pointed to one unpublished federal court decision, which acknowledged the possibility that landlords must tolerate child care centers on the theory that to do otherwise would be gender discrimination against women [Rana v. Gu, November 2016].
Update: In early January 2017, the parties reached a settlement and asked the court to dismiss the case.
For more on this case, and other recent court rulings on fair housing law, see the Coach’s February 2017 lesson, “From the Courts: Lessons Learned on Fair Housing Law,” available to our subscribers here.