Hi All,
i hope to get some info or any advice about owing an IP that currently having a long term Lease contract with a Company running and using the property as a Child Care Center. As a landlord what are the BIG DIFFERENT between leasing it to some1 who use it as a house. And leasing to some Company using it as a Child care center or (commercial purpose)? Any1 had any experience, advice or info about the Role and Responsibility as a landlord of the above property Please???? and please remember " every LITTLE HELP is A LOT of HELP". Cheer
Childcare is a tricky business as there are regulations that have to be followed. (and can change at a moments notice)
Like for example –
Child Safe glass windows. Are the windows safety glass or are they covered with a 3m safety film to prevent children injury or death.
Is the kitchen area gated to prevent children getting into the area.
Are the fences and gates outside child proof?
Is the Hot water set at 50 degrees celcius?Check with the local council on who is responsible (Landlord or business owner) for keeping the child care establishment up to required regulations.
If they do not know I am sure they will refer you to the right government department that handles these regulations.You might also need to have public liability insurance to cover you in case the business owner doesn't have enough insurance if sued.
thank you duckster, public liability insurance is what i need to look into. thank for the advice. any1 else can share few of there advice please?? Cheer
imar may have the sort of landlords insurance you may need.
They usually insure businesses
http://www.tradeinsurance.com.au/business/index.htmTake on board what Duckster has said however this is a commercial lease and you will need to acquaint yourself with the lease especially:
the obligations of the Lessor and Lessee, the indemnities provided by the lessee in the lease, the requirements placed on the lessee for the provision of insurances, compliance with council/state regulations governing the use, outgoings recovery, any obligations for maintenance, whether it is a gross or a net lease etc.Which state is this in? How old is the premises? How long does the lease have to run? Are there any options? On what terms? What are the rent review provisions? What are the alternative uses for the site? How long will it take to find another operator? Who owns the 'fitout'? Is gst payable or is it being bought as a going concern? Is there a bank guarantee or security deposit?
Will you be enaging a property manager as this will be a more complex investment than say a house or unit?
AS a person who has worked in the childcare industry, there are regulations that the operator of the business is required to meet and adhere to, these include having childproof fences around the whole property with childproof locks, safety glass, adequate parking provisions, covered outdoor play areas, certain outdoor and indoor learning spaces allocated per child and dependant on the ages of the children in care and thermostatically controlled hot water . They also need to have sufficient and age appropriate toilet facilities. These regulations are the responsibility of the childcare provider, however, I don't know how many of these they can request from the landlord. have you spoken to the current owner of the property? Also speak to the local governement as well as the state licensing authority for chidlcare services.
Cheers
Sonya
thanks you 4 all the comments. as i say Every little Help is Lot of Help. Cheers
Hi, our family has a IP which is used as a child care centre and have had it for over 10 years now and it has proven to be a very positive investment with 5% annual rent increases. The only pain we've experienced is where the business has changed hands (about 4 times in 10 years) and lawyers are needed to sort out leasing agreements – we've had a few issues where we've been expected to pay lawyer fees when a new company takes on the business. Apart from that, we've always responded quickly to any safety issues (minor) or problems such as hot water, overgrown trees, etc. which keeps the tenant happy and never a complaint with the rent. Also another plus is the tenants have spent considerable money on improving the yard and building inside which has added value to the property…
Hi
If you are buying a going concern it should already have all these things in place and if not they would not be a licensed child care centre. These businesses are heavily regulated and it would be a commercial investment for you. They would have had development approval from the council to run the place as a child care centre so I dont think its a question of renting as a home or centre, it is a centre. If you want a home then buy one, it would be cheaper than buying a child care centre. Your solicitor would be able to let you know what you need in relation to insurance and leases. The council for the area is a good starting point if you want to understand more about child care centres, also in NSW, DOCS is the main licensing body if you want to understand more about the physical requirements. In NSW the person in the know generally about centres in the area is the Children's Services Manager from the local council. They are pretty across the child care centres in their locality. I dont know about other states.
Bottom line its a commcerical building which essentially already has the requirements in place.
Hope this helps
Toni
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