More and more people are choosing to launch a business. Small businesses are surprisingly plentiful and prosperous, according to the Small Business Administration, as of 2017. With around 30 million small businesses in the United States, many people are seeing the value of growing their own startup in a volatile economy.
Starting a home-based business from your own property is pretty much straightforward. However, what if you’re renting? Is it legal? The short answer is – yes! You can run a business from rented premises.
That being said though, there are a couple of steps you need to follow. Otherwise, it can be a source of problems between you and your landlord.
Permission from the housing association
You’ll need to seek permission from the housing association if you rent a property from them. Different housing associations have different rules. As such, you may need to pay yours a visit.
When seeking their permission, you need to send them a letter. It should contain details such as:
- Details of the home-based business.
- Any planned extra buildings. For example, sheds or outbuildings.
- Levels of noise, operating hours and whether the business may disturb your neighbors.
- Commercial vehicles that may be used.
- Details of any advertisements or signs that may be required to be put around the building.
- Details of changes that may be made to the property.
Getting your landlord’s permission
Asking your landlord for their permission is necessary. If you don’t, you may find yourself in legal problems if they come to discover later that you’ve been running a business in the rental property without their consent.
We spoke with Dawson Property Management Inc. about this issue. They advised that even before asking them, check your lease or rental agreement first. Does it have clauses that prohibit home-based businesses? If it does, enquire from your landlord if it’s possible to change it.
Some mortgages also prohibit the use of rental property for non-residential purposes. The landlord may also need to change it in regards to this factor as well.
However, your landlord shouldn’t have a problem if your business is largely or entirely online-based. Freelancer jobs – writing, translating, or web designing – usually don’t cause any disruptions.
Why would your landlord not allow you to run your home-based business?
- Requiring too much floor-space. This may result in the landlord breaching their mortgage agreement. This is because too much floor-space can see a property deemed non-residential.
- The nature of your work having a potential damaging effect on the property’s condition. An example of a business that can have a damaging effect to the property is running a painting business. Another example is a home-based hairdresser business. The use of chemicals to dye and treat hair may cause significant wear and tear to the property.
- Causing a disturbance to the people living around you. If you live in a flat complex with thin walls, then starting a business as a music teacher may not go down too well.
Be ready to work out something with your landlord
You need to be ready to work out something with your landlord if they have any worries or just simply need more urging.
Be ready to deliberate on these important issues:
- Insurance – You should consider getting the necessary business insurance. Letting your landlord also know about this may help to avoid having conflicting insurance policies.
- Planning permission – If you are making any sort of difference to the living conditions of your neighbors such as creating a spike in road traffic or are trading to the public from the premises, you may need permission from both your landlord and your council.
- Business rates – You may need to pay business rates under certain conditions. For example, if you employ other people to work at your property or if you sell goods or services to people who visit your property.
- Energy bills – Your bills will obviously be higher if you’re at home all day even if you try to save energy. To make up the difference, your landlord will likely want to increase how much you pay.
Other options
If for whatever reason you can’t run your business from your rental property, then you should consider other options instead. They are as follows:
- Incubators – Business incubators can help reduce the costs of launching and operating a startup by as much as 50%. Examples of business incubators include Corporate Accelerator, CodeLaunch, Campus Blairon, C4DI, St. John’s Innovation Center and Naiot Venture Accelerator.
- Self-storage unit – With this option, you’ll incur less costs, bills and overheads.
- Mobile business – Instead of working from your rental unit, you could be traveling to your customer’s offices or homes and offering the services there.
- Hiring desks/co-working spaces – You’ll not only connect with like-minded people, but you’ll also incur less costs.
So, while it’s certainly possible to run your business from a rental property, it pays for you to do your own research and check that you have met any stipulated requirements.
