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Did you have anything in writing from the landlord that it is OK to run a commercial child care facility out of the house?
Did you really tell the landlord that you would be running a commercial child care facility out of the house? Or did you ask if it was OK to watch a child? Because it would be OK for you to have your grand-kids for the weekend, whom you were not being paid to watch. Were you extremely clear that you would be running a business?
At any rate, unless you got it in writing, you are in a very weak position.
I'm going to guess that the down payment for the lease to own is not going to be refundable. What does your contract say about that?
I agree with the other posters. You put money down to buy a house without even learning whether or not there was an HOA, or checking the zoning, or anything else?
There is a very good chance that your business has annoyed a neighbor in some way or another. You or your customers have done something obvious, otherwise why would anyone know that you are running a day care?
(I've had several applicants try to sneak in a day care center by telling me that they'd have a few kids over every now and again. It takes a lot of questioning about the kids to get them to admit that they plan to run a daycare -- which my insurance company won't allow. Sad fact that too many tenants try to minimize or deceive about what they want to do in order to try to sneak it in. Maybe OP didn't do that, but I wonder if OP and the landlord had a miscommunication over what having kids over really meant))
Nothing in writing, just witnesses (a mother of a child I was watching was here when she was here looking over some windows being fixed).
I told landlord that I watch children for income. I told her I do not watch more than state allows (3).
Neighbors were aware that I babysit and provide daycare, because I post ads on the neighborhood website.
I don't have signs in the yard or anything obnoxious.
We put money down and agreed with terms to our lease.
I'm 28, I've never gone through owning a home or HOA or anything. My parents never owned. I wasn't aware of things like this. I assumed the lease was our only contract.
Talk to a lawyer and have them review your lease. In my lease I make the tenant responsible for following any hoa laws/bylaws (of which one is no commercial business's on the property etc). Just from what you've written it sounds like you'll probably lose the $8,000.
I'm guessing you are not in California... maybe your State has a similar Day Care provision to that of California?
The reason I say this is on several occasions I have had tenants set up daycares... two times it was licensed daycare and I had to accept it even though my lease clearly prohibits business activities as does my Insurance Carrier.
Ever since the Governor declared a Child Care Emergency Landlords and Municipalities and HOA's have been powerless to stop Day Cares and a Landlord cannot even require the Daycare maintain Insurance as long as the parent/guardian signs a notice acknowledging the daycare has no insurance.
Where it became interesting is the when the Inspector or Fire Marshall required alterations... such as a secure fenced play area... outlet covers, childproof cabinet locks... etc.
Thankfully, I was under no obligation to provide these and by the same token the tenant could not be prevented from making the alterations on their own dime with the provision the property be returned to the unaltered state when vacated...
In my state, no one is legally responsible to make sure you get them. But that doesn't stop the HOAs from being able to enforce them.
The CCRs (codes, covenants and restrictions) in my area typically say that for any rental property, the lease has to say that a tenant agrees to comply with the CCRs.
Have you read the CCRs at this point? Do they say the landlord is responsible to give you a copy? If so, and they didn't, that puts more liability on them.
I'm surprised your lease doesn't even make any reference to them or the HOA at all.
As for the other issue, of getting your down payment back, do you have a contract for the purchase? There should be paperwork somewhere that defines what your contingencies are and what the penalties are for defaulting. If it is just referenced in the lease, it should say something like "in the event that tenant does not close on the house, the $8000 is [refundable/nonrefundable/applied as additional rent/treated as security deposit/split 50/50]". If not, then you should never have put any large sums of money down in the first place. My guess would be that barring any paperwork to the contrary, the down would be handled in court as a large security deposit, and be subject to the same rules as a deposit would be.
In the end, I would say that you aren't without some of the blame here. You didn't know, but that is no legal defense. See what your lease says about a lease break penalty, and then negotiate that and the refund of your down payment from that point. Don't expect to walk away with no penalty at all, though.
This will likely be a problem for any house in an HOA you move to, so make sure to ask enough questions in the future, and get it in writing. Most landlords will not allow it at all, so it might take some doing to find somewhere where both the subdivision and the landlord are ok with it.
And finally, never do a lease purchase/lease option without involving an attorney.
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