DEAR MR. MYERS: I own a house in a quiet neighborhood that I rent to a tenant. The tenant recently informed me that she has received a state license to open a day-care center at the home, where she would care for four or five children every day. This scares the heck out of me, in part because I am worried that I might be held financially liable if one of the kids gets injured while on my property. Neighboring owners are upset too, especially about the prospect of noisy kids running around. Can I stop this tenant from opening the day-care operation?ANSWER: You have asked a difficult question. The answer depends largely upon where your rental property is located.

Some states and counties allow landlords to completely bar their tenants from conducting virtually any type of business from their dwelling unit, especially if the apartment or rental house is in a neighborhood zoned only for residential purposes. If such laws didn't exist, tenants would be free to set up a busy at-home store or professional practice that could worsen local traffic and cause parking problems, or even begin a machine shop whose daily noise almost certainly would drive their neighbors crazy.

Several states, however, provide a few exceptions to the general ban on work-at-home businesses. For example, the Health and Safety Code in California - the state where your letter came from - specifically says that landlords cannot restrict a tenant from opening a licensed day-care facility.

In passing the exemption, legislators said that the state's booming population has created a shortage in quality care for kids and that enforcing the ban would negatively affect children and working parents alike.

Check with both local and state officials to see which rules apply in your area. If you can't stop the tenant from opening a day-care center in the home that she leases from you, there are a few steps you can take to help protect yourself from lawsuits if one of her "charges" is injured.

One is to demand that she provide a copy of her state-approved license, which likely requires the tenant to purchase liability insurance. Get a copy of her insurance policy and contact information for the company that sold it to her. Also talk to your own insurance agent to see if you should raise your personal liability coverage, the cost of which might be able to be passed along to the tenant.

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