Variances not defined in CCR's

Started by ChrisA8 • 5 replies • 2253 views

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ChrisA8 (South Carolina)
Posts: 7

Posted:

We have a resident asking for a variance to run an online business from his home. It will have no impact to the community as their are no onsite customers but he needs a letter from the HOA to send to the county.

Our CCR's restrict use of homes to anything other than being a residence. There is no mention of variances anywhere in our CCR's. We are in SC, is there anything in the Nonprofit Act that would direct us what to do?

TimB4 (Tennessee)
Posts: 21,059

Posted:

Chris,

Even if there are no on-site customers, there may be additional deliveries that could have an impact on the roads. It depends on the type of business.

Typically, Boards do not have the authority to waive the covenants unless the document specifically mentions it. This is because the CC&Rs is a contract between all property owners. Because the CC&Rs, have a "no business" clause, even if the Board granted a variance, it's likely the variance wouldn't hold if challenged by another member. However, you should check with your Associations attorney to be sure.

With all of that said, most boards do not enforce the "no business" clause of the CC&Rs unless it causes a problem within the Association. Some have amended the CC&Rs to allow certain businesses and exclude others.

Our CC&Rs specify "No Property shall be used except for residential purposes."

However the members adopted a policy resolution to better define that clause:

"All Living Units are to be used for residential purposes only. Home professional offices may be maintained only in accordance with the provisions of The Declaration, any requirements of applicable [name of county] County law and any rules and regulations enacted by the Board of Directors with respect to the use of Lots for home professions."

Granted, if challenged, this resolution might not hold up in court. However, since the membership accepted this resolution it's likely that it won't be challenged.

Your board may want to adopt a similar resolution which should suffice for the county.

If you care to share, what type of business is the individual asking to operate from their home?

Hope this helps,

Tim

MelissaP1 (Alabama)
Posts: 13,836

Posted:

I am of the opinion that this rule of the HOA does NOT involve certain type businesses. These are the stay at home or online types. The purpose and intent of the rule of no business use of a home pertains to "Putting a shingle out" type businesses. That means those type business that are professional like Photography, doctor, dentist, lawyer or those that need a sign/license to practice.

It is like the difference between a babysitter and a daycare. If your teenager was to babysit your neighbors kid, would you consider this a business? There has to be a line. That line should be with the IRS as well. Look at their definitions to help create or understand what business definitions may fall into before rejecting.

I would say online business should be okay.

Former HOA President

LarryB13 (Arizona)
Posts: 4,099

Posted:

Quote:

Posted By ChrisA8 on 04/25/2012 5:13 PM
We have a resident asking for a variance to run an online business from his home. It will have no impact to the community as their are no onsite customers but he needs a letter from the HOA to send to the county.

Why would the county care about an online business? Or more to the point, how would they know about an online business if the homeowner did not tell them? OK, there may be a sales tax issue but the truth is that most home-based online businesses never take in a dime.

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

Variance denied. The HOA cannot grant a variance because the business is not based within the HOA.

BrianB (California)
Posts: 2,820

Posted:

i always love this question...

it's so simple, yet so complex, because of all the varying differences in definitions.

what is a business? where does it truly reside? how do you really measure impact? what is 'conducting work' or 'running a business'?

I have no answers, I just love the huge ambiguity of the rule in this modern age.

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