Can I run a business from a residential property?

15 November 2021

I’m looking at buying an old house and renovating such to use as offices for my general medical practice. In the area that I’m looking at there are a number of small businesses also operating from houses. However, I want to make sure I’m allowed to run my practice from this property. How can I do that?”

To ensure that you can operate your medical practice from the relevant property, you will have to look at your title deed as well as at the zoning of the intended property.

The title deed of the property may contain conditions that restrict the running of any  business or the running of certain types of businesses on the property. The title deed may also contain restrictions on the extension or expansion of the buildings on the property,  which in turn may also restrict you from expanding your offices. It is therefore important to conduct a due diligence on the property and ask your attorney or property specialist to draw a copy of the title deed and review such for any restrictions. If there are restrictions, you can apply to have them lifted, but this could be a laborious and costly exercise. So do the trouble beforehand to check this.

You will also have to look at the zoning of the property. Zoning refers to the division of a city into zones which in turn restricts the type and number of buildings and their uses in that  zone in order to facilitate the proper use of land. To determine which zoning your property falls under you can contact your local authority for clarification on the zoning or ask your attorney or property specialist for help to do so.

It must be noted that each local authority will have different by-laws and rules governing zoning. Therefore, it may be that even though certain businesses may operate in a zone, other businesses are not allowed. Once you establish the zoning of your property, you can then determine whether the zoning is for residential and/or business purposes. Should business activities be allowed, it may also be prudent to ensure that you discuss the type of practice you will operate with your attorney or property specialist to ensure that your practice falls within the business activities allowed. It may happen that your initial practice
is allowed, but that you are limited in the options for expanding your practice later. Again, a thorough due diligence beforehand will help avoid issues later.

Should it transpire that your zoning does not allow your type of intended business activity, then you could consider applying for the rezoning of the property. A rezoning application can be lengthy and costly, and you will need to involve the services of your attorney as well as a town planner to assist you with the necessary applications. It is also not a given that your application will be successful. Needless to say, that without your local authority’s approval for a rezoning of the property, you will not be able to lawfully conduct your practice on the property.

The implications can be massive if you buy a property and renovate it for a business which it then transpires you are not allowed to run lawfully from the property, therefore it is highly recommended that you consult with your attorney or property specialist beforehand to help you conduct the necessary due diligence before you decide to buy the property.

Who gets to choose the conveyancing attorney?

Who gets to choose the conveyancing attorney? 17 September 2021 I’ve finally found a buyer for my property. I want my brother, who is an attorney, to do the transfer on the sale because then I know it will be done right and fast, but the buyer wants his attorney to do...

Home Loan – What to do when you settle yours

Home Loan | ​What to do when you settle yours Home Loan Settlement can be a confusing process. We walk you through the Do's and Don'ts below. 17 September 2021 “After nearly 20 years I’m finally at the point where I’ve just about repaid my home loan. This has me...

Why must I, the purchaser, pay the transfer fees, but the seller can choose the attorney?

Why must I, the purchaser, pay the transfer fees, but the seller can choose the attorney? 17 September 2021 “I’m buying my first property. I’m quite nervous about everything and a friend of mine who is a conveyancer said she would help me with the transaction. However...

Are you liable for historical arrear property rates on your property?

Are you liable for historical arrear property rates on your property?   17 September 2021Who is responsible for historical arrear property rates and taxes on your property? The good news is that the person who owned the property at the time the debt was incurred...

A strange thing called servitude

A strange thing called servitude 17 September 2021“I applied to my municipality to have the building plans for the extension of my garage approved. The municipality rejected my proposed extension on the grounds that it would be constructed over a servitude registered...

The previous owner did not pay. Can the municipality now cut off your electricity?

The previous owner did not pay. Can the municipality now cut off your electricity? 17 September 2021The municipality has notified me that it will disconnect my electricity supply because there are outstanding payments in respect of my property. However these...

Must I pay capital gains tax if I sell my house?

Must I pay capital gains tax if I sell my house?   17 September 2021“I bought my house, which I’ve always lived in since buying it, for about R1 million in 2000, and on my auditor’s advice had it appraised in October 2001 for R1.1 million. Over the years I had...

Beware the suspensive conditions in the offer to purchase

Beware the suspensive conditions in the offer to purchase 17 September 2021 “I’ve made a written offer on property that has been accepted by the seller. The offer was subject to the condition that I acquire a mortgage from a bank for the full purchase price within 30...

How about that ‘suspensive condition’?

​How about that ‘suspensive condition’? 10 September 2021 “I’ve bought and sold a few houses in my time and have always seen provision being made for a suspensive condition such as that the agreement is subject to a home loan being obtained. I’ve got the gist of what...

How to validly extend the period for getting your home loan approved

How to validly extend the period for getting your home loan approved 10 September 2021 “I’m trying to buy a house. The purchase agreement is subject to the condition that I obtain a mortgage bond within 30 days. My time is running out but I’m close to getting the...