Are You Running an Illegal Business Out of Your Home?

Are you a mom running an illegal business out of your home?

No, I’m not talking about a housewife dealing pot out of her house, à la Nancy Price Botwin (Mary-Louise Parker) in Weeds.

A full fifty percent of Americans work from their homes. A quick survey of some of the moms living in my neighborhood found a professional dog walker, a party planer, and a mom embroidering baby blankets for her Etsy store, all operating out of their homes.

Full disclosure, I work from home. No fancy law office for me, just a room in my house that is (supposed to be, but never is,) off limits to my kids. My almost 10 year old made me this cool sign for the door using supplies she found in the room she’s not supposed to be in:

My practice is almost entirely virtual. No, not like virtual reality (though that would be really cool). “Virtual” just means I work from home and almost all of my communication with clients is over the phone or by email. Good thing because any clients coming into my house would probably cripple themselves stepping over Legos and Barbie accessories.

Okay, so all of the cool kids are running businesses out of their homes. Guess what? You could be running an illegal business without even knowing it. How?

Check your HOA rules (or lease if you rent)

Everyone loves to complain about their HOA (homeowner association). Exorbitant fees, aggressive enforcement of petty rules, the list of complaints can be long.

Believe it or not, but I actually live in two separate HOAs (with two separate sets of rules and fees). The number and complexity of the rules is hard for my husband and I to follow, and we’re both lawyers.

If you live in a HOA, or are leasing your home, be sure to check the HOA rules or lease to make sure you are permitted to run your business out of your home. For example, most HOAs have rules against disturbing other homeowners. Having customers constantly coming in and out of your house (and parking on the street) is going to disturb your neighbors. If your business attracts this much traffic, you shouldn’t be operating it out of your house.

A few of my neighbors, based on the sheer volume of items they sell on NextDoor, are either down-sizing hoarders or are running a re-sale business out of their house. I’m pretty sure this violates our neighborhood’s no garage sales, etc. rule, a rule a lot of HOAs have. Come on people, if you have dozens of posts a week for toys and baby gear and we all know you have no kids, we know what’s really going on.

Check all of the codes

You should also research zoning laws and business ordinances and licensing.

Zoning laws are intended to separate incompatible land uses, like commercial and residential. While zoning laws are primarily in place to prevent development that could hurt property values (e.g., putting up a cell tower smack in the middle of a residential area), they can definitely apply to home-based business, especially if your home-based business creates traffic or parking issues.

Your city may also have additional ordinances aimed at preventing people from running businesses that create a lot of foot or car traffic from operating in a residential neighborhood.

Finally, be sure to make a trip to City Hall to make sure you have all of the required business licenses and registrations.

For more information about operating a home-based business, be sure to check out my posts about License and Permits for Your Home-Based Business, Start-Up Legal Checklist for Your New Home-Based Business, and How to Not Lose Your Pants in Your Home-Based Business.

Are you running a home-based business? What problems have you run into with your neighbors? Leave a comment or send me an e-mail.

Disclaimer: This website is made available for educational purposes only as well as to give general information and a general understanding of the law, not to provide specific legal advice. By using this website you understand that there is no attorney client relationship between you and the publisher. The website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.