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Starting a home business can be filled with pitfalls beyond the question of whether or not your productivity suffers if you work in pajamas. Frequently, zoning laws and other rules or regulations will apply to a home business.
Zoning laws limit the way in which land owners and residents can use their own properties. Generally, zoning laws distinguish between residential, commercial, and industrial properties, and can prohibit areas zoned for one use to be used for other uses. Depending on what your home business entails, and how the area where your home is located is zoned, you could face legal consequences for operating a home business.
Concerns for Home Business Owners
As with all businesses, your location matters. In addition to local zoning laws, you should also look up any applicable CCRs (restrictive covenants) or details in your lease. There's also the potential issues you may face with neighbors, which you should consider.
If a home is zoned in an area that is only a residential area, running a high traffic business, like a sandwich shop, will likely run afoul of the zoning ordinance. Typically, residentially zoned areas do not want home businesses to operate that require customers to visit the residential location, especially if there is a high volume of customers.
However, someone who runs a business exclusively on the internet will not have to worry about customer or client traffic. Also, employee, or other business related, traffic can be a problem if your home business requires you to have several, or even just one or two, employees at your home with you, or a high frequency of UPS deliveries and pick-ups. Generally, telecommuting, and unobtrusive, or internet based, businesses, will always be okay.
If a home happens to be zoned in a mixed use area, you will likely have more freedom to turn your home into a business. However, even in mixed use areas, local ordinances may require permitting or licensing to be in place before you start operating your business.
If you are renting your home, you will want to check your lease or rental agreement before doing anything else. Frequently, a lease will contain specific provisions about the commercial use of the property. Along those same lines, homeowners could be subject to CCRs, also known as restrictive covenants, or HOA bylaws, which may prevent certain types of home businesses.
What If You Violate Zoning Laws?
Even if a home business violates zoning laws, you may be able to obtain a variance, or other relief, from your local government. A variance, like it sounds, will allow a property owner to do something that would be a violation of a zoning law.
While you may be able to get away with violating zoning laws so long as no nitpicky neighbors or angry clients report you, knowing whether or not you are in compliance is usually pretty easy and cheap to accomplish. Getting in trouble for violating zoning laws could costs thousands or more, not just in fines and penalties, but also in relocation costs for your business (not to mention lost opportunity costs). Most cities and counties post the local zoning laws and local zoning map online for everyone to have easy access to it.