The California legislature has determined that family day care homes for children should be situated in "residential surroundings so as to give children the same home environment as provided in a traditional home setting". The legislature has voided restrictions that directly or indirectly limit the acquisition, use, or occupancy of property for family day care homes for children. A "day care home" is defined as one that regularly provides care, protection, and supervision for 14 or fewer children for periods of less than 24 hours per day". The day care operator can be a renter provided they notify the land lord and furnish the landlord with an increased security deposit.

Associations may not directly prohibit or indirectly limit day care homes. Notwithstanding, they may adopt reasonable rules that include:

• The homeowner or tenant operator must obtain any license that may be required. Different conditions and requirements are imposed by California law for family day care homes regarding state and local licensing. Associations should check with the local Community Care Licensing Division Child Care Office for local information.
• Operators must maintain: (1) liability insurance in the amount of at least $100,000 per occurrence and $300,000 aggregate, or a bond in the aggregate amount of $300,000; or (2) affidavits signed by each parent with a child enrolled in the family day care facility that states that the parent knows that the day care center does not carry insurance or a bond.
  If there is insurance or a bond, the association may require that it be named as an additional insured, provided that the association pays any additional premium assessed for this coverage. The association should also obtain appropriate insurance through an independent insurance broker.
• Day care operators must comply with all local and state laws regulating the licensing and operations of a day care center. A "Manual of Policies and Procedures" sets forth the regulations and operating procedures of a licensed family day care home.
• Associations should require day care operators to indemnify, defend, and hold the association harmless for' any liability arising out of the operation of the day care facility.