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Renters’ home-based businesses often restricted by agreements

Zillow • Dec 31, 2013 at 4:07 PM

By S.E. Slack

When Joe Johnson lost corporate his job recently, he saw it as a sign that he should boost his home-based, sideline photography business. Already pre-approved for a home loan, he needed something that could quickly produce enough income to keep lenders happy as he searched for a home to buy. He didn’t realize he could be evicted from his apartment in the process.

Many rental agreements contain provisions that prohibit commercial use of a rental property. Typically, these provisions are designed to ensure the landlord doesn’t run afoul of local zoning ordinances which often have existed for decades. Some locales, such as the Home of the Blues, haven’t changed zoning laws since 1981. That could mean your high-tech, low-impact home business doesn’t even have a category for it yet. In Norwalk, zoning laws are considerably more up-to-date.

Sometimes, however, other factors are at play that neither renter nor landlord have considered. If you rent or own rental property inside a neighborhood governed by a homeowners association, for example, HOA rules could exclude all home-based businesses.

That might seem extreme, but even the simplest of businesses can pose hazards or other issues. A seamstress who allows customers into her home to measure and fit clothing, for instance, might not seem like a high-risk business but she represents added traffic in the neighborhood and increased liability as a result. An eBay seller represents extra wear and tear on neighborhood roads from the delivery services that pick up or drop off products regularly.

Condominium owners and renters, too, can be subject to covenants, conditions and restrictions (CC&R) rules. While most CC&R’s don’t flat out ban home-based businesses, they often contain language that address issues that can arise out of a home office, such as storage of hazardous materials, signage or noise.

Renters who have a business that presents no outside appearance, wear and tear or liability – such as a freelance writer – can sometimes negotiate with a landlord to eliminate the home-based business restriction. If an agreement can’t be reached, it could be time to find a small commercial office rental or move to a rental property that doesn’t pose the same restrictions.

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