Run a business from home – legally

The number of people working from home is increasing, and home offices have become almost as common as lounges.

Having employees work from home cuts down on time wasted in commuting and reduces the use of resources and energy at company premises. In many instances people work from a different country, and it is no longer seen as imperative that they be in the same office as the rest of the employees. In Cape Town and other holiday towns home owners are also opening their homes to guests.

But, says Lanice Steward, managing director of Knight Frank Residential SA, you need to consider the legal implications of doing business from home if more than one person is using the space.

“All rights to a property are governed by the Land Planning and Ordinance Act, which determines whether owners may run their businesses from home or not. Homes that are zoned Single Residential 1 (SR1), are primarily intended as accommodation for single families. However, they may also be used as bed and breakfast accommodation, have home offices or be used for child care.”

She says that one of the most important requirements for running a business from home is the ratio of off street parking available. There has to be one parking bay available for every 25m² 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. A home office is generally used by one person such as a freelancer or contract worker who has the flexibility to work from any premises. They would probably not have visitors or meetings with clients at their homes, so there would be no negative impact on the neighbours – who may not even be aware that they work from home.

For businesses with employees, only three people are permitted to work on premises zoned single residential.

“Bed and breakfast accommodation has become popular as a means of supplementing incomes. However, home owners are only allowed to rent out three rooms to a maximum of six guests, and may not convert the rooms to self-catering units. This is in keeping with building regulations which stipulate that each single residential unit may only have one kitchen.

“If you want to rent out more rooms or have self-contained units, you must apply for a departure from the municipality for the operation to be legal,” says Steward.

“There is also an increasing need for child minders and parents tend to prefer home care to larger institutions. If home owners choose to run child minding services, only six children can be accommodated. 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 residential areas, owners will have to apply for consent from the municipality. Although the regulations may seem onerous, they are not an impediment to running a business from home but they do ensure that the integrity of the neighbourhood is maintained and that neighbours are not disturbed.”

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