Care Home, Assisted Living home lease

2 Replies | Los Angeles County, California

I just bought a rather large single family in LA, posted an ad for rent and the first 2 calls are from businesses who provide care home or assisted living servicing. I have never done any lease like this so far.

can anyone tell me what are the things which are different compared to the traditional residential lease in California?

- Do I need a commercial lease ?

- Is there a potential zoning issue?

- Do I need a different insurance than the residential income property insurance?

- What is the rule of thumb for the rent (+15% above market?)

- What are the downsides for the landlord, compared to a traditional residential lease to a family for instance?

@Kevin Lefeuvre I have experience doing these types of leases as both an operator and a landlord. To answer your questions: 

- We have used commercial lease agreements 

- Zoning can be a very big problem depending on the location and type of home. I am in Georgia, and the requirements for an existing home to be a personal care home can vary county by county and even more narrow than that. For example, there was an area we wanted to open a facility in, but the home was within "city limits", which meant the guidelines required a petition for the home to be licensed for more than 3 residents. 

- General Commercial Liability Insurance

- The largest downside is that it could take some time to find a replacement tenant, mileage will vary on location, facility, etc. Specialty modifications might need to be made like the installation of a sprinkler system and/or wheelchair accessible entryways and ramps. 

Let me know if there are any other questions!