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Operating a business out of a residence

Started by BillB17 • 11 replies • 825 views

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BillB17 (South Carolina)
Posts: 92
Posted:
Our Declaration states that "Lots may be used for single-family residences only and for no other purpose." This is the only such restriction of use anywhere in our documents and there is no other language which addresses this issue.

There are many owners who run businesses out of their homes - catering services, lawn care services, hair salons, security system installations, etc. In some cases these businesses have been in operation for 10 years or more without any challenge from the Association.

Our new BOD is just now beginning to evaluate whether operating these businesses is in violation of the restriction of use.

These are all single-family residences and that is what they are used for. Looking for opinions on whether or not operating a business out of any owners single family residence constitutes a violation of the strict meaning of the restriction.

Also since these have been operating for a long period of time, would the BOD now be able to shut them down if they determine it is a violation of the restriction.
AugustinD
Posts: 5,144
Posted:
Quote:
Posted By BillB17 on 01/21/2019 11:48 AM
Also since these have been operating for a long period of time, would the BOD now be able to shut them down if they determine it is a violation of the restriction.


Case law nationwide generally says that, if a restriction has been violated for many years (like 7+ where I am, which is not South Carolina), and the HOA has not challenged the violator, then the covenant is abandoned.

If I were on your board, I would not go after anyone for this, because they are standing on pretty solid legal ground at this point. This also goes for anyone who, say, just started a home business in the last year or so.

The HOA might be able to notify current members that, before the sale date of their new home, they need to disclose to the new owners that the covenant will be enforced against anyone buying a home after 2018.

Before your HOA board proceeds, consult your HOA attorney.
BillB17 (South Carolina)
Posts: 92
Posted:
I should have mentioned that these businesses are only "operated"out of the residence. They do not have clients coming to the residence for any reason.
AugustinD
Posts: 5,144
Posted:
Quote:
Posted By BillB17 on 01/21/2019 11:57 AM
I should have mentioned that these businesses are only "operated"out of the residence. They do not have clients coming to the residence for any reason.


What is the evidence that these businesses are "operated out of" the residence? Do you mean that certain HOA members move their business's food or equipment from the house into vehicles, and some of the vehicles are marked with the business name?

If there are no clients coming to the home, then I think it is a stretch to say that the home itself is being operated as a business. Maybe the home is supporting a business, but I would be hard pressed to give people grief for this and feel like I was on solid ground.

What exactly is bothering you or others about this situation? Parking of trucks and vans? Unsightly signs on the vehicles? What?
BillB17 (South Carolina)
Posts: 92
Posted:
AugustinD - I do not know what the BOD motivation is to initiate this issue at this time.
MarkM19 (Texas)
Posts: 1,459
Posted:
Bill,
The board has to have better things to do than chase this rabbit down the hole.

In California we had a few instances where commercial vehicles were allowed to park in the driveway for many years. The main offender told the board that the Builders agent selling told him that his Cable truck was allowed. Then some on the new board members wanted the rules enforced to the letter. The attorney pointed out to us that this person would be considered "Grand Fathered" since no action was taken for at least 3 years.

I do not have any idea what your laws are in SC but in my mind if they are not causing any excess traffic or parking violations they should be able to do what they want inside their property.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
The general consensus has been no vehicles, no customers, no foul.
KerryL1 (California)
Posts: 14,550
Posted:
It seems like what is really happening is that some residents in some homes own or operate businesses that are not on the HOA's premises.

How could anyone object to that??? It does not oppose the CC&Rs at all.

So it seems like it must an issue with these owners' signed or oversized vehicles in the driveways. Maybe bill can ask a board member what the issue is.

KellyM3 (North Carolina)
Posts: 2,239
Posted:
Quote:
Posted By BillB17 on 01/21/2019 12:43 PM
AugustinD - I do not know what the BOD motivation is to initiate this issue at this time.

New HOA boards - an individuals new to board service - almost always go hunting for some action to take in their new role.

If people are simply parking their vehicles in their driveways, which would be the "nuisance" of a home-based business, I'd recommend the board go sniffing elsewhere. Besides, with multiple businesses, it's clear the residents aren't up-in-arms about the matter.

Good luck.
RoyalP
Posts: 1,104
Posted:
Working from home and/or using one's home as a 'home base' is NOT the same as operating a business OPEN TO THE PUBLIC @ one's home.

D'OH
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Quote:
Posted By RoyalP on 01/22/2019 12:22 PM
Working from home and/or using one's home as a 'home base' is NOT the same as operating a business OPEN TO THE PUBLIC @ one's home.

D'OH

I agree. No traffic, no customers, no machinery, etc., then no foul.
LetA (Nevada)
Posts: 2,679
Posted:
IMHO if they have clients coming to the property then I would see an issue. If the landscape company has their trucks and trailers parked in the street, I would see a problem. if an owner rents out a 4 bedroom home to 6 college students and 7 cars are parked on the street, I see A BIG PROBLEM. and those problems need to be addressed with the progressive fines laid out in your governing docs.

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