A BILL TO BE ENTITLED
AN ACT to protect the rights of homeowners and tenants to operate licensed family child care homes by limiting restrictions by homeowners associations, landlords, and local governments.
Whereas, licensed family child care homes are a vital component of North Carolina's child care infrastructure, providing care for small groups of children in residential settings and serving families who depend on accessible, community‑based care; and
Whereas, homeowners associations, landlords, and local government zoning regulations may impose restrictions that prevent qualified individuals who are homeowners or tenants from opening or operating licensed family child care homes, thereby reducing the availability of child care; and
Whereas, the State has a compelling interest in expanding child care access, and that interest is served by ensuring that residential property owners and tenants can operate licensed family child care homes without unreasonable interference from private covenants or restrictive local zoning requirements; and
Whereas, licensed family child care homes are consistent with residential use and shall be treated in zoning law as residential uses of property for purposes of land use regulation; Now, therefore,
The General Assembly of North Carolina enacts:
SECTION 1.  Chapter 110 of the General Statutes is amended by adding a new Article to read:
"Article 7A.
"Protection of Family Child Care Home Operations.
"§ 110‑107.25.  Definitions.
The following definitions apply in this Article:
(1)	Family child care home. – The same meaning as set forth in G.S. 110‑86(3)b., limited to facilities licensed under G.S. 110‑88.
(2)	HOA governing document. – Any declaration, covenant, condition, restriction, bylaw, rule, or regulation of a homeowners association, condominium association, planned community, or similar entity that governs the use of residential property.
(3)	Landlord. – The same meaning as set forth in G.S. 42‑40(3).
(4)	Licensed operator – Any person holding a valid license to operate a family child care home issued by the Secretary pursuant to G.S. 110‑88, whether the person is a homeowner or a tenant residing at the licensed premises.
"§ 110‑107.26.  HOA restrictions prohibited.
(a)	Any provision of an HOA governing document that prohibits, restricts, conditions, or penalizes the operation of a licensed family child care home by a member or resident who holds a valid license issued pursuant to G.S. 110‑88 is void and unenforceable as contrary to the public policy of this State.
(b)	A homeowners association or condominium association shall not do any of the following:
(1)	Deny, suspend, revoke, or condition membership rights or community privileges solely on account of a member's operation of a licensed family child care home.
(2)	Impose fees, assessments, fines, or penalties on a member solely on account of the member's operation of a licensed family child care home.
(3)	Require approval or consent of the association as a condition of operating a licensed family child care home.
(c)	Nothing in this section prohibits an association from enforcing rules of general applicability relating to parking, noise, exterior modifications, or use of common areas to the extent such rules do not impose requirements more burdensome on licensed family child care homes than on other residential uses.
"§ 110‑107.27.  Landlord restrictions prohibited.
(a)	A landlord shall not include in any lease, rental agreement, or tenancy arrangement a provision that prohibits, restricts, or penalizes a tenant from operating a licensed family child care home at the leased premises.
(b)	Any lease provision in violation of subsection (a) of this section is void and unenforceable as against public policy.
(c)	A landlord shall not terminate a tenancy, refuse to renew a lease, or take any adverse action against a tenant solely because the tenant operates or intends to operate a licensed family child care home.
(d)	A tenant operating a licensed family child care home remains responsible for compliance with all other applicable lease terms, including obligations regarding maintenance of the premises, liability, and insurance, and shall carry liability insurance in amounts sufficient to cover the operation of the child care home.
(e)	A landlord may require a tenant to do the following:
(1)	Provide written notice of the intent to operate a licensed family child care home.
(2)	Provide a copy of any license issued pursuant to G.S. 110‑88.
(3)	Require the tenant to maintain adequate liability insurance coverage.
"§ 110‑107.28.  Local government zoning; limitations.
(a)	For purposes of local land use and zoning regulation, a licensed family child care home shall be deemed a residential use of property and shall be permitted as a matter of right in any zoning district in which single‑family or multi‑family residential uses are permitted, including residential zones, mixed‑use zones, or any other district that allows residential dwellings.
(b)	A local government shall not adopt or enforce any zoning ordinance, development regulation, or land use restriction that does any of the following:
(1)	Subjects a licensed family child care home to requirements, conditions, or standards more burdensome than those applicable to other single‑family or multi‑family residential dwellings in the same zoning district.
(2)	Imposes special use permit requirements, conditional use permit requirements, or other discretionary approval processes applicable to licensed family child care homes but not to other residential uses.
(3)	Limits the number of licensed family child care homes permitted within a zoning district based solely on the child care use.
(4)	Requires a licensed family child care home to comply with commercial or institutional zoning standards, including but not limited to commercial parking minimums, commercial signage requirements, or non‑residential setback requirements.
(c)	A local government may impose on a licensed family child care home only those development standards that would apply to the residential use of the property generally, including applicable building codes, fire codes, and health and sanitation requirements.
(d)	Nothing in this section shall be construed to preempt or limit the application of standards adopted by the Child Care Commission or the Department of Health and Human Services governing the health, safety, and physical environment of licensed child care facilities.
"§ 110‑107.29.  Remedies.
(a)	Any licensed operator whose rights under this Article are violated may bring a civil action in superior court for any of the following:
(1)	Declaratory and injunctive relief.
(2)	Actual damages.
(3)	Reasonable attorney's fees and costs if the licensed operator is the prevailing party.
(b)	The Attorney General may bring an action on behalf of the State to enforce the provisions of this Article.
"§ 110‑107.30.  Application.
This Article applies to all HOA governing documents, lease agreements, and local zoning ordinances adopted before, on, or after the effective date of this act. Any provision of a governing document, lease, or ordinance that conflicts with this Article is void and unenforceable to the extent of the conflict."
SECTION 2.  Article 3 of Chapter 47F is amended by adding a new section to read:
"§ 47F‑3‑123.  Operation of a licensed family child care home.
A homeowners association shall not prohibit, restrict, or penalize the operation of a licensed family child care home, as defined in G.S. 110‑86(3)b., by a lot owner or tenant who holds a valid license issued pursuant to G.S. 110‑88. Any provision of a declaration, covenant, bylaw, or rule of the association to the contrary is void and unenforceable. This subsection shall not be construed to prevent the association from enforcing rules of general applicability as provided in G.S. 110‑107.26(c)."
SECTION 3.  Nothing in this act is intended to abrogate reasonable health, safety, building code, or fire code requirements applicable to child care facilities.
SECTION 4.(a)  There is appropriated from the General Fund to the Department of Health and Human Services, Division of Child Development and Early Education (Division), the sum of seventy‑five thousand dollars ($75,000) in nonrecurring funds for the 2025‑2026 fiscal year to be used as follows:
(1)	Develop and disseminate plain‑language guidance for licensed family child care home operators regarding their rights under Article 7A of Chapter 110 of the General Statutes, as enacted by Section 1 of this act.
(2)	Create model response templates and informational materials for use by licensed operators in disputes with homeowners associations, landlords, and local governments.
(3)	Update the Department of Health and Human Services' public website, licensing portal, and printed materials to inform current and prospective licensees of the protections established by this act.
SECTION 4.(b)  There is appropriated from the General Fund to the Department of Justice, Office of the Attorney General, the sum of one hundred thousand dollars ($100,000) in nonrecurring funds for the 2025‑2026 fiscal year to do each of the following:
(1)	Train attorneys and staff within the Consumer Protection Division or other appropriate division on the enforcement provisions of Article 7A of Chapter 110 of the General Statutes, as enacted by Section 1 of this act.
(2)	Establish a complaint intake process for licensed family child care home operators alleging violations of G.S. 110‑107.26, G.S. 110‑107.27, or G.S. 110‑107.28, as enacted by Section 1 of this act.
(3)	Prepare and publish an annual summary of complaints received and enforcement actions taken under this act, to be submitted to the Joint Legislative Oversight Committee on Health and Human Services no later than October 1 of each year.
SECTION 5.  This act is effective when it becomes law and applies to all acts, ordinances, and agreements entered into on or after that date. For HOA governing documents and lease agreements existing before the effective date of this act, provisions contrary to this act are void and unenforceable as of the effective date.