Thinking of renting rooms as daycare

Hi everybody,
I am thinking of renting out my two rooms as a daycare. They are separate from the house with separate entrance and bathroom.
What are the legal steps I need to take? Will my property be considered as commercial?
How is this idea, would it work at all?
Do I need to take liability insurance? What else do I need to do?
Will it effect my bills like water and hydro?
Which type of contract I need to sign?

and one more thing:
should I open my own daycare rather than renting out my two rooms to someone else?

Please guide and many thanks in advance.:)

The potential liability would be massive. You'd need to do some checking with your mortgage company, your insurance company and CRA but this could be a whole disaster if you aren't super careful. Some concerns I would want to be reassured about would be :-

1. If you are a home owner with a mortgage, check with your mortgage company. It's one thing to rent out a couple of rooms to tenants but the liability for damage or law suits if something happens to a child in the care of your tenant would be huge.

2. We all usually take out day home insurnace on top of our house insurance. This is for two reasons. Firstly, the increased volume of daily visitors increases the liability above the usual number of callers a home would have but also because not doing so, makes our own home insurance invalid with an undisclosed business. A totally unrelated claim like a washing machine flood would be declined. To have not only a business from your home, but that run and controlled by a third party, means that you could be liable for poor quality care, an accident a child has, or heaven forbid but a child's death. Do you really want to risk your own family home for something you have little control over ?

3. A lot of provinces only permit a home day care if the proprietor lives at the address as their primary residence. When someone rents rooms specifically for child care, then that falls under the legislation that requires a license much like any centre. Check your provincial rules because otherwise, you would be enabling an unlicensed day care to be run from your premises.

4. Not clear if you've ever run a dayhome yourself but having children home all day means all day heating, higher water bills, higher power bills, more wear and tear on property etc. In order to cover those business costs, a day home owner would calculate the sq footage of the primary residence being used for business and apply that percentage to their bills for a tax credit of their business costs. With the situation of renting out rooms for a daycare..

a. How will you know what to charge for utilities?
b. How will that day home operator claim their business expenses for utilities when the bill for these will be in your name not theirs?
c. How can you even decide how much of the power, water, heat is your personal use and what is the business?

5. If you get permission from mortgage company, insurnace company and resolve all of the above, you do realize that when you rent space to someone, then they are allowed to use that space for it's intended purpose 24x7. i.e. They will not be your rooms, you will not have the right to walk in, and they can show up all hours of the day every day if they choose to. Are you prepared for if your renter decides to offer 24 hour care if her numbers are low? Are you okay with children in an unfamiliar environment, crying during the night? Are your neighbors good with this too?

6. Are you going to have police checks for yourself/your family members ? Because without them being presented, your presence on the property could cause issue. With all due respect, if I was a parent at a dayhome where there was an adult (you) living at the address, I'd be very wary where you have no involvement in the daycare and I would not be okay with this situation. Just like I wouldn't be okay with a day home who also had tennants in the same house.

I don't think you've thought this through at all.