Renting to group home for the elderly

[Seth McGathey]

I recently had an applicant for a rental where she wants to run the 3 bedroom lower unit of my duplex as a group home for elderly. She makes it sound pretty legit, however I have never dealt with something like this. The people living there wouldn't actually be the tenants, her group home would be. So how would applications work? Also, if some of the elderly people are causing damages or problems, am I sort of limited in my response due to them being a part of a group home? Any info, directions to good info, or personal experience would be appreciated. 

[Janice Carter]

Seth, proceed carefully as a group home is very different from a standard residential tenancy. First, verify zoning and local licensing requirements. Even small residential care homes may require state approval, inspections, insurance and compliance with ADA/Fair Housing regulations.

Your lease would be with the operating entity and not the individual residents. You should require business formation documents, state license (if required), commercial liability insurance and clear use clause defining number of occupants

As for damages or issues, you would enforce the lease against the operator, not the elderly residents. Before agreeing, I would strongly recommend consulting a local real estate attorney and confirming zoning compliance.