Can a Renter Run A Home Based Business

Can a Renter Run a Home-Based Business?

Inc. recently cited a Small Business Administration statistic that said home-based businesses make up roughly half of all the businesses in the United States. If that is true, then many of those home-based operations are likely to be running out of rental homes. That begs the question: If you are contemplating starting a home-based business, do you need to get your landlord’s permission first? It may not always be mandatory by law, but it is a good idea in any case.

State Laws on Home Based Businesses

States may have differing laws regarding home based businesses, so always check with your local government for proper rules.  But if that business were a home day-care, some states are required to allow renters to run a home based day-care business out of their rental properties, but usually only if they’re licensed by the State.  In California, to operate legally without permission of the owner of the home, the day care must be limited to six children or less, including the day care provider’s own children. No more than eight children are allowed, and the landlord’s permission must be obtained once that threshold of more than six children is reached.

Review Your Lease Agreement

Where other home-based businesses are concerned, it is always best to check your copy of the lease for any mention of conducting business out of the home. Additionally, it depends on your type of business, but some may be forbidden by local zoning laws (farming operations come to mind). Be sure to check all of your real estate documentation prior to getting started.

Another consideration is whether your business will disturb the peace in the neighborhood; if a landlord receives a notice from the city (or more likely, the homeowner’s association) that his tenant is causing noise disturbances with music lessons or loud automotive repair activity, he is likely to be quite unhappy.

Check Your Restrictions

Finally, it should be noted that condominium covenants, codes and restrictions, or CCR’s, are often very restrictive, as are the rules of mobile home parks. Because they are managed by an ownership association, both are more concerned with home-based businesses than apartment complex managers tend to be.

If you are a tenant renting a home managed by a property management company or managed by a real estate broker, inquire about the laws and the landlord’s rules before starting a home-based business. Double check all of the documentation including any late fees.  Asking first will save both parties time and headache.  When in doubt, you can always check your lease for certain provisions, but in some cases, like the day care business mentioned above, if the state law prohibits restrictions by landlords, even the lease provisions could be unenforceable.  When in question, check with your local, trusted Property Management Company.  

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