Maryland enacts homeowner regulations for family child care businesses

On March 10, 2025, Maryland lawmakers introduced House Bill 785, a legislative proposal aimed at regulating home-based businesses within homeowners associations (HOAs). The bill seeks to clarify the operational framework for family child care providers and other no-impact home-based businesses, addressing concerns from both residents and HOA boards.

Key provisions of House Bill 785 include a requirement for family child care providers to obtain liability insurance, as specified under existing state statutes. This insurance must meet minimum coverage levels, ensuring that providers are financially protected while operating within their communities. Additionally, the bill stipulates that HOAs cannot impose insurance requirements that exceed these minimums, thereby standardizing expectations across different associations.

The legislation also empowers HOAs to require residents to notify them prior to starting a no-impact home-based business, which could include activities such as freelance work or online sales. However, it allows associations to restrict or prohibit such businesses from operating in common areas, maintaining control over shared spaces.

Debate surrounding House Bill 785 has highlighted the balance between individual entrepreneurial freedom and community standards. Proponents argue that the bill provides necessary protections for both business owners and their neighbors, while critics express concerns about potential overreach by HOAs in regulating personal business activities.

The implications of this bill are significant, particularly for families seeking to establish child care services in their homes. By mandating insurance and setting clear operational guidelines, the bill aims to foster a safer environment for children while also supporting local economies through home-based entrepreneurship.

House Bill 785 is set to take effect on October 1, 2025, pending further legislative review and potential amendments. As discussions continue, stakeholders from various sectors are closely monitoring the bill's progress, anticipating its impact on community dynamics and small business operations in Maryland.