Committee moves bill allowing licensed family day care in rentals amid landlord liability concerns

House Bill 543 passed the Economic Matters Committee on March 13 after a substantial exchange about infrastructure and insurance.

Sponsor (speaker 3) said the bill prohibits landlords from banning a tenant from operating a licensed family day care in a rental property but preserves landlord protections such as requiring additional insurance, higher security deposits and inspection rights. The sponsor and other supporters noted that state child‑care licensing limits occupancy and that the bill is aimed at expanding licensed options for working families.

Delegate Adams (speaker 8) voiced strong opposition, centered on two practical concerns: septic capacity in single‑family homes and the sufficiency of insurance to protect children and families if a serious injury occurs. “A septic system replacement is a $20,000 to $30,000 expense,” Adams said, arguing that security deposits and tenant insurance may not cover catastrophic repairs or harms to children. Adams said the bill, as written, could saddle landlords with hard‑to‑manage risks and potentially put children at risk if insurance gaps remain.

Sponsor and other committee members responded that family child‑care operations are regulated by the state’s licensing system, which controls occupancy based on square footage and sets required insurance for providers. Telia Bhandari (speaker 4) strongly supported the measure, citing a steep decline in licensed slots since COVID‑19 and saying the bill balances expanding childcare capacity with landlord protections, including a requirement that a tenant stop operating the daycare immediately if they fail to maintain required coverage.

The committee moved the bill favorably; the roll call recorded the bill as passing with 11 yes votes. Members opposed or voting no said they would like clearer insurance and infrastructure protections for landlords and more explicit guidance on applicability to existing leases.

The measure’s supporters said it would expand licensed childcare capacity, particularly family‑based providers, while keeping regulatory safeguards in place; critics urged further drafting to address septic systems, long‑tail liability and how coverage interacts with landlord policies.