Can you run a business from a sectional title home?

2016-05-05 06:00

The sluggish economy and declining employment over the past few years have prompted an increasing number of people to start their own businesses as a way of earning an income.

“Most of these small or micro-business owners can’t afford to rent an office, shop or manufacturing space, so their enterprises are almost by definition home-based,” says Andrew Schaefer, MD of leading national property management company Trafalgar.

However, he says, establishing a home-based business or full-time home office in a sectional title (ST) scheme can be problematic, and owners must be sure to do things the right way or they could find their fledgeling enterprises grounded for good.

“It is clear from the Sectional Titles Act that a flat or townhouse is intended for residential use, and generally cannot be used as an office or place of business – unless the owners of every other unit in the ST scheme agree in writing to a change of use.

“On the other hand, times and lifestyles have changed so much since the Act was introduced that we as managing agents always encourage owners and trustees to consider change-of-use applications very carefully rather than just rejecting them out of hand.

Running a home-based business may be the only way for a fellow-owner to earn a living and keep up his levy payments, for example, so agreeing to him doing so may be in their own interests.”

Schaefer says there are three main factors that the members of the body corporate can use to guide their decision to grant or withhold permission:

  • Noise, and on that basis, an accounting or computing business is a whole different proposition from a vehicle repair or woodworking business.
  • The possible inconvenience or “nuisance” the business may cause, particularly in regard to security and parking.
  • Advertising and signage. Is there provision in the prescribed management rules for ST schemes that prevents owners or residents from doing anything that might harm the ‘reputation’ of their scheme?

“Owners generally don’t want their ST scheme to lose its residential character and end up looking like an office park or a mini-factory complex. Signboards advertising the various businesses that it houses - would most likely have a negative effect on the value of all homes in the scheme.

“Consequently, even if they do approve the change of use and establishment of a home-based business, they may want to veto the placement of any advertising material or signage for that business anywhere on the common property.”

(Issued by: Trafalgar Property Group)

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