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The Neighborhood Bully
Homeowners’ Associations Can Ban Home Businesses
By Jan Norman
More than half of new businesses in the U.S. start at home, reports the U.S.
Census Bureau.
But before you order business cards for your startup or
relocate your home business to a new community, check whether home businesses
are allowed in the neighborhood.
And don’t just check city, county, state
or federal regulations. Your biggest obstacle might be your homeowners’
association. Many homeowners’ associations completely prohibit any business in
the name of protecting the residential nature of the neighborhood.
Why,
they can’t do that, you protest.
Yes they can, says attorney Brett Weiss
in Olney, Md. “There are no restrictions on what homeowners’ associations can
require. It’s a private contract that every resident agrees to comply
with.”
If you don’t want to comply, don’t buy in that
community.
Prohibiting home businesses in residential neighborhoods
didn’t cause a big conflict until technology and the Internet made it possible
to run substantial businesses at home. Now, the U.S. boasts about 13 million
home-based businesses, reports the U.S. Small Business
Administration.
The sheer numbers suggest that home businesses exist in
every community, regardless of what the homeowners’ association rules
state.
But beware. “Many still prohibit home-based businesses because
they used legalese boilerplate in writing their covenants, conditions and
restrictions,” Weiss says.
You’re not helpless against such old legal
language. If you want to run a business in your home, but the covenants,
conditions and restrictions say no, try these tactics to sway your homeowners’
association.
1. Change The Rules
Talk to members of your
homeowners’ association board about updating the rules to recognize reality
while protecting the neighborhood.
Home businesses range from no impact,
such as a copywriting service, to major impact, such as a foundry. Seek new
rules that allow low-impact businesses, such as those with few or no employees
and no exterior evidence of the business.
2. Consider
Reality
Investigate how the association board has enforced the home
business prohibition, Weiss says. Are other homeowners operating businesses from
their houses?
“If everyone is doing it, and no one is enforcing it, then
you can probably stop it from being enforced at all,” he says. “If the president
of the homeowners’ association has been running a home-based business … The
association has to show that it treats everyone the same.”
3. Work
With Neighbors
Find out your neighbors’ concerns about noise, traffic and
odors, says Pam Brown, consumer sciences specialist at the Texas Cooperative
Extension in College Station, Texas. “Your business must be viewed by neighbors
as a beneficial part of the neighborhood,” she says. “Try to find a
balance.”
4. Stress The Benefit
Home-based business bans
evolved from a negative view of the impact on the neighborhood, so emphasize to
the association board the value of having home business owners around to
discourage daytime burglaries, Weiss suggests.
Protect Your Home
Business
Don’t depend on your homeowners’ insurance to
cover your home-based business. Check out the NASE Home Office Protection Plan –
offered at no additional cost to NASE Premier Resource Members.
You’re
protected in case of fire and lightning, theft and burglary, ice and snow, as
well as other events. You get coverage for up to:
-
$7,500 worth of equipment
-
$20,000 worth of business liability coverage at
your residence
-
$1,500 for temporary relocation of your home
business