Business Law Advisor

[#1]

If you live in a planned residential neighborhood or complex, your business activities may be restricted to your Homeowners' Association Covenants (HOA), Conditions, and Restrictions (CC&R) rules.  CC&Rs are designed to protect the community's collective property value by prohibiting undesirable activities.  Common CC&R rules enforce particular paint colors, landscaping arrangements, or ban the installation of satellite devices - but they can also have a serious impact on your home-based business.

Quick facts about covenants, conditions, and restrictions

You may be wondering how it is legal to restrict activities within your own home.  The legal basis for CC&Rs is founded on the idea that certain actions can interfere with neighboring properties and their owners' use.  Residents voluntarily choose to live in a planned community, so the law requires that they are bound to any CC&R rules in place.

Most CC&Rs don't outright ban home-based businesses, but they may address some of the issues associated with running a home office: customer parking, noise, signage, traffic - activities that would have a perceived negative effect on your neighbors. 

Zoning rules vary - know what applies to you
The first step for home-based business owners, or those thinking about starting a home-based business*, is to understand your local zoning ordinances.  Find out what your city or county's definition of "residential property" is.  Definitions often vary in terms of specificity - some are intentionally vague to allow for low-profile business activities, like writing, photography, or accounting, while others prohibit all commercial activity.   

Residents of properties with CC&R rules will likely see extra restrictions on top of their local zoning ordinances.  Planned communities are usually more focused on enforcing their rules than local governments are, but it is important to comply with all local regulations. 

Rules for renters
If you are a renter and operate a business out of your residence, check your lease - it's standard for residential leases to prohibit commercial use of the property.  Even if your business activities do not violate any local zoning ordinances, you could be evicted for breaking the terms of the lease.

Appealing CC&R rules
Already up and running?  If you already run your business from a residence that bans home-based offices, you may be able to fly under the radar, but for your own piece of mind, and for the security of your business, you can attempt to change the CC&R rules through your Homeowner's Association. 

Discuss your situation with your neighbors - their support could significantly help your chances and the Board of Directors in your homeowners association.  If you can persuade the board (usually made up of other resident-owners) that your business's daily activities will not have a negative impact on the community, they may be willing to amend the rules. 

Help with CC&R issues
For help with CC&R and zoning issues that pertain to your home-based business, see your city or county clerk's office or meet with a local small business attorney.   Read on for other free training and assistance resources.

Related Resources:

• Starting & Growing a Home-Based Business - Uncle Sam Has Some Props That Can Help!
• Licensing Requirements for Home-Based Businesses
• Before You Start Your Home-Based Business: Do Some Due Diligence
• 10 Steps to Registering Your Business

*Hyperlink directs reader to non-government Web site.

Message Edited by NicoleD on 10-22-2009 01:51 PM

[#2]

Yes, and the Condo Association is subject to the whims of their board of Directors

[#3]

Thanks for bringin that up donace.  Most condo association boards are made up of volunteer resident-owners... all the more reason for small business owners to run for a board position!

[#4]

Absolutely!  Condo association boards can really screw you over and even make changes once you are living there that can affect you in a lot of different ways, home business, renting a unit, fees..it can really suck

Message Edited by NicoleD on 12-21-2009 07:57 AM

[#5]

This advertisement has been removed from public view.