As more and more employers choose to allow their staff to work remotely, the home business model has grown in popularity, with many new entrepreneurs choosing to start their business from home rather than in a business district. But, what are the legal implications of operating a business in a residential area?
Getting in the Zone
Zoning laws prohibit most businesses from operating in a residential area unless they have received special permission in the form of a temporary departure. But, these cannot be transferred to the next homeowner if the property is sold. The better route would be to have the area rezoned to a mixed-use zone that allows home-based businesses to operate
Exceptions that prove the rule
Before you fly into a panic about the one-desk study that functions as your entire accounting practice, you should know that most micro businesses do not require any special permission to operate in a residential zone. The key condition for these home operated businesses is that the building must be predominantly used for residential purposes and the owner of the business must live there. As long as your business adheres to certain micro-business behavioural criteria (which can usually be found on your relevant city council’s website), your home business should be allowed to operate without any special permission.
Examples:
- Bed and breakfast
- Hair and beauty salon
- Dentist or small medical practice
- Crèche/child care facility (only a certain number of children can be accepted)
Day trip to the district planning office
Before your business starts operating, chat to somebody at your local distract planning office to check that you are not infringing on any regulations that govern home-based businesses. If your business is of a different nature than the above described, then you too will have to visit your local district planning office to verify and alter the zoning of your property if need be. The office will be able to advise you on the process required to achieve this.
Paperwork or Penalties
Any home-based business owner also needs to follow through on the various legal steps involved in starting a business, like acquiring a business or trading licence. Though it might be tempting to forgo the inconvenience of acquiring the required legal clearances for your home business, it is not easy to hide the fact that you’re running a business from your neighbours. If one of them takes a dislike to your residential company and lays a complaint (which happens more regularly than you might think), then you could face some serious penalties for operating a home business without the required permissions.
