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Running a business from home - legally

09 Dec 2014

With the increasing number of people working from home, preferring to be freelancers or contract workers, and more entrepreneurs starting up their own businesses, the need to set up a home office is one that is just as normal as having a study or lounge in the home.

Thanks to technology and forward thinking companies allowing workers to work from their choice of premises, whether at home or wherever their laptop is, home offices have become quite common.

Thanks to technology and forward thinking companies allowing workers to work from their choice of premises, whether at home or wherever their laptop is, home offices have become quite common. This cuts down on the wasted time commuting and cuts the resources and energy consumed within the company’s premises as they tend to keep just the key staff in the office. There are even situations where people can work from another country, and it is no longer seen as imperative that they be in the same office as the rest of the employees.

This is according to Lanice Steward, managing director of Knight Frank Residential SA, who says however, the legal implications of doing so must be considered if it is not just one person using the space.

She says there are, too, many more people, particularly in Cape Town, opening their homes to guests as bed and breakfasts or guesthouses.

All rights to a property are governed by the Land Planning and Ordinance Act, which determines whether the owner is able to run his business from home or not. If the home is zoned Single Residential 1 (SR1), it is primarily zoned as accommodation for a single family. It could, however, also be used as bed and breakfast accommodation, have a home office in it, or be used for child care.

One of the most important requirements to running a business from home is the ratio of off street parking available. There has to be one parking bay available per 25 square metres of the building used for business purposes. Another is that if there are any additions made to the property for the business, these cannot be more than 25 percent of the overall floor space of the house, and the space must be able to be re-integrated back into the home if it is ever sold.

There is a difference, however, between a home office and a business run from home, the differentiation must be made to establish what is allowed. A home office is generally for one person who is a freelancer or contract worker and has the flexibility to work from whichever premises he chooses.

She says that person would in all likelihood not have visitors or meetings with clients at his home, so there would be no negative impact on the neighbours and, in fact, they might not even know he works from home.

If, however, it is a business where there are staff members involved, the maximum allowed to work on the premises is three people.

Steward says bed and breakfast accommodation has become popular as a means of supplementing one’s income. The owner is, however, only allowed to rent out three rooms with a maximum of six guests, and he may not convert the units to self-catering units. This is in keeping with building regulations which stipulate that single residential units may only have one kitchen.

If the owner wishes to rent out more rooms or have self-contained units, he must apply for a departure from the Council in order for the operation to be legal.

There is, too, an increasing need for child minders, and parents tend to prefer home care to larger institutions. If a homeowner chooses to run a child minding service, only six children can be accommodated, and there must be ample indoor and outdoor play area, as well as enough parking for parents who are dropping off and collecting their children.

For any other business in a residential area, the owner will have to apply for Council’s consent.

“Although the regulations may seem onerous, they are not an impediment to running a business from home, and they do ensure that the integrity of the neighbourhood is maintained and that the neighbours are not disturbed,” says Steward.

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