Can your clients run a business from home? Depends on the type of housing.

December 01, 2020

Your clients say they run a home-based business and ask what rules apply. Your answer depends on what type of housing those clients are considering.

Condominium owners must abide by the declaration, bylaws, and rules of their condominium owners association (COA) or property owners association (POA), which will list limitations on use of the unit. The rules are sometimes referred to as the declaration or the declaration of covenants, conditions, and restrictions (CC&Rs). State law gives associations the right to dictate approved condo uses.

Condo owners should also learn their property’s zoning use designation to make sure their home-based business is allowed by the city. For example, some zoning use laws may prohibit all home-based businesses in residential areas, while others may only limit the type.

Single-family homebuyers have similar concerns to condominium owners. Homebuyers should check for any deed restrictions or neighborhood POA rules (such as CC&Rs). They should also review their property’s zoning use: single-family residential zoning is often more restrictive for home-based businesses than multifamily or mixed use.

Beyond that, homebuyers should research their city’s ordinances for rules applicable to home-based businesses, including:

Street parking
Noise
Odors
Allowed storage
Square footage
Outdoor signage
Allowed employees
Prohibited businesses.

Tenants may not be able to operate their home-based business at a rental property. In addition to any restrictions based on the type of housing being rented, the ability of a renter to operate a home-based business will also depend on the residential lease itself. Paragraph 12D(3) of the Residential Lease (TXR 2001) prohibits home-based businesses of all kinds, including childcare.

Your clients may need to register their home-based business with the city and/or county or get a license to operate legally. Many cities have dedicated webpages or available information designed to help home-based businesses get up to speed quickly and easily. The office of the governor also has a Texas Business Permits and Licenses Guide available, which provides information on permits required for business enterprises in the state. Your clients may also want to consult with an attorney if they have any questions on the specific permits required for their home-based business.

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