What You Need To Know About Home-Based Businesses and Zoning Laws

Most people don’t think about zoning laws when they first decide to start a business out of their home, and most home-based businesses never hear from local governments about zoning violations even where they are clearly in violation of local zoning laws. The reason why is that most home-based businesses are stealthy. Modern technology allows entrepreneurs to conduct virtually all aspects of a business’ operations (short of manufacturing and direct sales) without leaving the computer. Employees can work from their own homes, products can be delivered via on-line companies and services can be provided off site. So long as signs aren’t posted, traffic isn’t increased beyond what is normal for residential neighborhoods and excess noise isn’t a factor, no one notices that a home-based business even exists. In fact, a neighbor’s complaints are generally the only thing that ever puts a home-based business on a local government’s radar.


So what’s all the fuss about zoning laws? Although most home-based businesses are stealthy, some business owners are looking to more visible home-based options. The recession has encouraged many would be entrepreneurs to consider starting a business, and one of their first major cost decisions is location. For a small business requiring employees, product assembly and manufacturing, customer visits, vendor deliveries or any combination of the preceding, understanding local zoning ordinances is critical. Otherwise, they risk being shut down. 

Some localities forbid home based offices completely. Others allow home based offices for professionals such as lawyers, doctors and accountants. Even the most liberal of localities will allow home based businesses only under certain circumstances, and the zoning laws can vary greatly from municipality to municipality. Generally, they have the following in common: they require that the business be only incidental to the home as living quarters taking up less than a certain percentage of the home’s overall space; they require that all employees of the business reside in the home; they require that increased vendor and customer traffic is not beyond what is normal for the residential neighborhood; they prohibit the use of equipment that creates a nuisance such as noise, vibration or fumes that are detectable outside of the home; they prohibit the use and storage of hazardous materials; they prohibit the warehousing of business inventory; and they prohibit any changes to the outside appearance of the home (including signage).

If you are considering a home based business that for any reason will be noticed by neighbors, it’s important to know the zoning laws in your locality. The easiest way to check your local zoning laws is at the main branch of your public library. You can also contact your local Planning or Zoning office. However, it’s probably better not to put yourself on their radar. It may be better to have a friend in the neighborhood call and check for you. You can also try contacting the city clerk’s office or your local Chamber of Commerce, or check your city’s home page online. If you live in or are considering moving to a planned community with a homeowner’s association, the CC&Rs (covenants, conditions and restrictions) are likely even more restrictive than those set forth above.

Before putting the future of your business at risk, think about how visible your home based operation will be.  If there is any doubt about zoning laws, consider other options.  For instance, if your only visible operation will be meeting clients, consider a virtual office where you can meet clients on an as need basis.  If warehousing is a problem, consider an off-site storage location.  These are affordable alternatives to leasing space for an office or store.  It is very unlikely even in a planned community that anyone will question your work at home which is strictly limited to telephone calls, email and the internet.

Once you become the subject of a neighbor’s complaint, the battle with your zoning commission becomes time consuming and costly.  You can appeal decisions, ask for exceptions and/or seek variances.  However, these methods are costly (especially seeking a variance) and often lead to further expense.  The zoning commission may require you to submit to unannounced fire inspections and comply with OSHA, ADA and other government regulations.  In the end, you are still at the mercy of the zoning commission who could later decide to pull your permit.  If you’re uncertain about how to proceed, consult a business attorney regarding your options.

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