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Condominium Association - When Does a Home Business Become An Issue?

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Posted by Duane McPherson, CMCA, PCAM® on Feb 28, 2018 8:11:00 AM

Young businessman with his cellphone in his home officeMore and more people these days are either telecommuting or engaged in the "gig economy" - freelancing out of their homes. Many of these home businesses are not an issue for the association - but some are. With more owners not wanting to buy in developments that disallow home-based businesses, condominium associations need to address the issue in a way that is fair to all of their residents.

Traditionally, it has always been the case that running a business from a condo is disallowed by the association in all cases, but with the economic changes, a more flexible rule of thumb is generally applied. The business should be "zero impact" - that is to say, it should not change the residential character of the building (or neighborhood). So, what business activities become a problem?

1. Excessive deliveries: While a box of inventory for a trade show a few times a year will slip in with the regular mail, businesses that receive deliveries on a regular basis increase the traffic to the building and cause issues. If somebody is running a home business, they should receive shipments only infrequently and use the mail or a normal residential courier.

2. Employees: A business that has employees should not be run out of a condo - both for increased traffic reasons and because whatever liability insurance the owner has may not properly cover passage through the common areas.

3. Clients visiting the home: If somebody is running a real estate, tax advice company or similar, then they may have a large number of clients coming in and out. The increased foot traffic can affect security (A smart thief could use the business as cover). In these cases, associations may not want to force the person to shut down but may ask them to meet with clients elsewhere, such as a coffee shop. One particularly tricky matter is daycares, which many associations choose to ban (a lighter alternative is restricting the number of children).

4. Noise: Teaching music, for example, can create noise levels which would be fine in a house, but not so in a condo. (Of course, merely practicing music can cause similar problems in thin-walled multi-occupancy buildings). A pet daycare might result in happy barking that annoys neighbors. Noise complaints can sometimes be dealt with by bringing up business restrictions.
5. Signs: Signage put up outside for a business can be an eyesore and generally should be disallowed.

6. Legalities: Condo associations can always put in a provision that businesses have to abide by local laws. These generally do restrict the kind of business that can be conducted in purely residential areas.

The overall solution? Condo associations should consider moving away from the outdated and potentially discriminatory "No business activity" rules and update to more specific restrictions that limit the kind and type of business activity that can occur. A freelance writer sitting at their computer all day is unlikely to even be noticed by the neighbors. These rules should be specific and cover the issues above, most especially traffic and security. They should also include activities where the person is not receiving compensation - some people try to get around association rules this way. Also, as a rule of thumb, if nobody complains, it's reasonable to leave the person alone. 

Additionally, modern condo developments often include office and conference space - allowing for accommodations such as the scheduled use of a conference room for occasional meetings with clients.

Home offices should be handled within rules that are neatly set out, but it is no longer reasonable to expect people to have a 9 to 5 job somewhere else and be able to survive - thus the rules need to balance the right of other owners to quiet enjoyment with people's right to make a living.

If you need more advice on how to handle home businesses and other issues in your community association, contact GrandManors today.

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Duane McPherson, CMCA, PCAM®

Duane McPherson, CMCA, PCAM®

Over 30 years experience in property and community association management Professional Community Association Manager through the Community Association Institute (CAI) Former GM/CEO of a large-scale association: mixed-use commercial, residential and recreational Contributor to National industry experience