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Zoning Laws for Home-Based Business

Depending on where you live, you may be facing certain restrictions on the type of business you run from your home. Historically, zoning laws were quite strict, often refusing to allow any business to be conducted in residential neighborhoods. Now, with over one-half of all US businesses being run from home, local governments are easing the rules. Home-based businesses are good for the economy, and the latest changes in the law are reflecting that fact. Of course, as with most things, the government can be slow to catch up and it is important that you check into your local zoning regulations before you launch your venture.

The most common zoning laws for residential areas regulate four broad areas:

1. Business Activities

Most cities limit the type of businesses allowed in residential communities. These rules are generally logical -- you can't do anything dangerous or unsanitary in a neighborhood with families.

2. Physical Changes / Visibility

Generally, there are pretty clear restrictions on making any exterior changes to your property for your business. You typically cannot post signage or paint "Open For Business" across the side of your house. You can't set up displays of your products in your yard. Some areas even disallow commercial vehicles to be visible from the street, though many jurisdictions overlook a single vehicle with signage. However, you are likely to have a problem if you park a fleet of vehicles in your neighborhood every night.

3. External Effects

External effects are anything your business might do to cause discomfort to your neighbors, such as excessive noise or odors, bright lights, or the use of hazardous materials.

4. Traffic

Most zoning regulations do restrict the number of customers or clients (or visitors) to businesses in residential areas. Many also prohibit employees from working out of your house as well. At the very least, most areas limit the number of employees you are allowed to have working from your home. In those areas, there are typically also rules about employee parking -- you need to keep them off of the street or may need to provide extra parking to be approved.

Conclusion

Most cities and towns enact a single set of zoning laws to cover the entire jurisdiction. Be sure to check into the laws in your area before you start your business. If you need a permit for a home-business, get one before you launch. If any part of your business will violate the established regulations, don't be overly discouraged, as getting a variance (a ruling allowing your business to violate certain parts of the regulations) is usually an option. As long as the variance you need will not negatively impact the neighborhood, you have a good chance of being approved.

In addition to governmental restrictions, any home-based business in a neighborhood with a Home Owner's Association (HOA) is likely to run into an even stricter set of rules. Your HOA should have their regulations available to you. Read them carefully as you plan your business, as some HOAs are extremely restrictive and sticklers for following their standards. Again, you can usually request a variance from your HOA management, but these variances are often more difficult to get than those from the government! Be sure you are aware of the risk you take in failing to comply with the HOA rules, should you opt to do so. Some include heavy financial punitive damages for violating the letter of the regulations, others simply send out a stern letter once in a while. In general, you are better served to play along with the HOA rules as well as the government's zoning laws.

About the Author

LaunchX.com is dedicated to training entrepreneurs to turn their good ideas into great companies. The LaunchX System provides step-by-step education in the mindset and skill set entrepreneurs need to succeed. Our program includes intensive seminar training, key business software, and specialized workbooks that teach you the fundamental skills you need to achieve your financial and worklife goals through entrepreneurship. Register today for our introductory course and see what LaunchX can do for you!