How your HOA can kill your home-based child care business

By Deborah Goonan, Independent American Communities

 

Last week I posted a legislative update of new HOA, condo, and co-op statutes in Virginia. One of those bills H1853, recently enacted amended the home-based business provisions related to association-governed, deed restricted communities.

Today I’ll clarify my previously stated opinion, and explain why I doubt that newly enacted amendments will effectively prevent HOAs from shutting down in-home child day care services.

 

Overview of H1853 (2019)

Here’s a screenshot of H1853, from Virginia’s official legislative website:

VA H1853 home based business child day care bill


Read H 1853

An Act to amend and reenact § 55-513.2 of the Code of Virginia, relating to the Virginia Property Owners’ Association Act; home-based businesses.

[H 1853]
Approved
 

Be it enacted by the General Assembly of Virginia:

  1. That § 55-513.2 of the Code of Virginia is amended and reenacted as follows:

§ 55-513.2. Home-based businesses permitted; compliance with local ordinances.

A. Except to the extent the declaration provides otherwise, no association shall prohibit any lot owner from operating a home-based business within his personal residence. The association may, however, establish (i) reasonable restrictions as to the time, place, and manner of the operation of a home-based business and (ii) reasonable restrictions as to the size, place, duration, and manner of the placement or display of any signs on the owner’s lot related to such home-based business. Any home-based business shall comply with all applicable local ordinances.

B. If a development is located in a locality that classifies home-based child care services as an accessory or ancillary residential use under the locality’s zoning ordinance, the provision of home-based child care services in a personal residence shall be deemed a residential use unless expressly (i) prohibited or restricted by the declaration or (ii) restricted by the association’s bylaws or rules as provided in subsection A.


In my April 16 article, I wrote in my analysis:

Parents of young children, who rely on child care providers in their community, take note of this new law.

Your day care or after-school care provider might be forced out of business, if your POA’s governing documents prohibit this type of home-based business, either now or in the future.

This particular new law threatens the property rights of homeowners, who may have relied on local zoning which allows child care as an “accessory or ancillary residential use.”

If a POA decides to amend its governing documents to forbid home-based child care services, property owners will either have to relocate their facilities or go out of business.

 

Shortly after I published the article, I was contacted by one of the bill’s sponsors, David Bulova, who tells me I have it all wrong.

He insists that the new law says that “the HOA will use the underlying zoning to define whether child care is a residential or business use.”

Bulova says the new law takes away discretion from the HOA to classify home based child care as a business.

While that may be true, Virginia statute does not take away the HOA’s discretion to govern “time, place, and manner” of operating a home-based business.

Nor does the amended version of Virginia Statute erase an HOA’s legal rights to specifically prohibit home-based child day care, as defined in their governing documents, now or in the future.

Allow me to explain.

“Except to the extent the Declaration provides otherwise…”

In my observation, whenever a law starts with an exception based upon Declarations (Covenants, Conditions, and Restrictions, CC&Rs), it means that virtually everything that follows may not apply to you, your community, or your private property rights.

So, if your CC&Rs specifically state that you cannot care for children in your home, when you are compensated for your services, then H1853 will not stop your HOA from shutting down the neighborhood child care provider.

It’s true, however, that many CC&Rs are less specific. For example, your governing documents may prohibit most “business” uses of homes.

H1853 says that your HOA cannot classify your child care activities as a “business,” if your local zoning classifies the activity as a “residential” or “ancillary” use.

So, at first glance, it looks like H1853 will help child care providers, making it harder for HOAs to prohibit their home-based services. Keep in mind, this only applies if your local zoning classifies in-home day care as a “residential” use.

However, H1853 does not prevent HOAs from amending their Declarations (CC&Rs) to specifically restrict home-based child care, regardless of local zoning classification.

And homeowners should not doubt that this can happen.

Suppose the voting majority of your HOA is controlled by a Declarant (developer or homebuilder) or investors. In that case, it’s relatively easy for the controlling voting interest to amend your CC&Rs to prohibit in-home child care services, or any other home-based business or hobby, for that matter.

It’s also possible — though somewhat less likely — that your HOA can collect the requisite number of member votes to add a new restriction against child day care in your community.

From my reading of the Statute, your HOA is free to change the Declaration for the express purpose of preventing you from offering child care services out of your home.

But that’s not the only way your HOA can restrict your home-based business activity.

 

…restricted by the association’s bylaws or rules…

This statement in H1853 is problematic for several reasons.

For one thing, bylaws normally govern the operation of the association and the duties of officers, and do not normally include restrictions or rules. So it’s hard to imagine that an HOA would contain restrictions on acceptable uses of private homes in the bylaws.

But, in any case, HOA board members usually amend bylaws without a vote of all members of the association, unless the governing documents require a membership vote.

They rarely do.

As for rules, in the state of Virginia and elsewhere, your HOA, condo, or co-op board can enact new rules, without a membership vote. While your board’s rights to enact rules are limited by the authority provided in the CC&Rs, many governing documents give the HOA specific rights to govern the use and appearance of privately owned homes and yards.

For example, most HOAs have an Architectural Standards Committee that approves changes to your landscape, the exterior finishes of your home, and any additional structures such as fences or swimming pools.

If your home’s appearance isn’t up to standards, your HOA can enforce violations of dozens of rules and covenants, by imposing fines or taking you to court.

Child on a bike.(Morguefile.com free image)

Likewise, many governing documents allow the HOA to enforce rental restrictions, as well as enact rules to clarify the meaning of “singe family residential” use — a very common phrase in the Declaration.

So H1853 does nothing to prevent your HOA from enacting rules that make it difficult or expensive to conduct a home-based business.

In fact, Virginia Statute states that your HOA can make…

…reasonable restrictions as to the time, place, and manner of the operation of a home-based business…

Read between the lines.

Virginia law does not gives someone the absolute right to provide in-home child care. It only says that your HOA cannot prohibit home-based care outright, under certain conditions.

But, let’s say that local zoning considers your child care activity to be a residential use, and your HOA Declaration does not specifically exclude in-home child day care.

Even then, who is to judge the “reasonableness” of an HOA’s “time, place, and manner” restrictions on the operation of your home-based child care business?

You see, this boiler-plate “time, place, and manner” language is the typical HOA-industry strategy to restricting your rights, while at the same time claiming to “protect” them.

I’m not buying it.

 

Onerous conditions on your property rights

Here’s how it works.

Your state law may say that the HOA cannot prohibit _________(fill in the blank). But the HOA can enact and enforce so many obstacles and conditions that a homeowner or resident cannot reasonably exercise her property rights without a huge fight — and potentially expensive legal battle with her HOA.

Example:

The HOA cannot prohibit your right to display an American Flag, but it can disallow a flag pole, and they can limit the size and location of the flag. One Florida homeowner eventually lost his home after a years’ long battle with his HOA over the placement of a flag in a flowerpot on his front steps.

With regard to home-based child day care, I can easily imagine HOA boards cooking up restrictions and rules like this:

  • You can offer child care in your home, but for drop-off and pick-up, the parents have to park in the common/guest area a quarter-mile away, so as not to create the “eyesore” of parked cars in front of your house, and to avoid additional traffic on your street.
  • You can only offer care between the hours of 9 am – 5 pm on weekdays, no weekends. ( of course, that wouldn’t help many working parents, would it?)
  • The kids can only play outside between the hours of 11 am – 1 pm, and all back yard play equipment has to be approved by the Architectural Committee and HOA first.
  • While outdoors playing, children cannot cause a nuisance or noise disturbance.
  • To prevent HOA insurance liabilities, the children cannot play in the common areas, unless the child care provider pays for additional insurance coverage.
  • No sidewalk chalk, no riding toys or basketball hoops in the driveway, no playing in the front yard, etc.

Limiting your right to make a living

I’ve communicated with hundreds of homeowners over the past several years. They’ve share with me many ridiculous rules that make it difficult for them to earn a living.

Some HOAs won’t allow a resident to park a commercial vehicle in their own driveway, even if it’s just a sedan with a printed company logo or a pickup truck with a few garden tools in the back.

One HOA fined another owner for parking his limousine on the public street in front of his house for less than one hour.

Over the past two decades of homeownership, I have known neighbors that operate home-based beauty salons, auto detailers, and photography studios. I’ve known crafters of custom furniture, quilting artists, and organic gardeners.

And, yes, I’ve known child care providers that operate out of their own homes.

Luckily for them, they didn’t live in HOA-governed homes.

And, I’m sad to say that today, many of these home-based business opportunities would be banned or legally challenged in HOA-ville. ♦