Can I run a business from a residential property?
15 November 2021
Question .. Can I run a business from a residential property?
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.
What to look out for when deciding to run a business from a residential property.
Title Deed Conditions
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 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 doing 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 you are limited in the options for expanding your practice later. Again, 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, 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.