Home-based businesses play a significant part in the nation’s economy, with close to one million people running a business from their home. If your tenant is considering, or already doing this, it is important that you are aware.

For all intents and purposes, a general tenancy agreement is an agreement between a landlord and tenant regarding the use of a property for residential purposes. If a tenant is running a business without a landlord’s knowledge, there may be an issue.

If your tenant is seeking your approval prior to starting the business, you’re off to a good start; but it’s important to consider how this may or may not affect the agreement in place, the property itself and the relationship with your tenants. 

As a landlord, here are some things to consider:

• How will the property be physically affected? Will there be excessive wear and tear, above the expectation of general use? Will there be an increase of demand on services, utilities and appliances? Will there be additional fixtures and fittings (at tenant’s expense)?
• If clients will be visiting the property as part of the business, consider how this will impact the surrounding neighbourhood. Excessive parking may require special permit. 
• Some mortgages prohibit businesses being conducted on the premises.
• It’s important for landlords to check if and/or how their property’s insurance will be affected.
• The business owner/tenant may require Public Liability Insurance, appropriate to the type of business. It may be appropriate for the property manager to have a copy of this.
• There may be council regulations which affect zoning of certain types of businesses, and certain licences or regulations to adhere to. Everything must comply with relevant laws and local government regulations. While this is the responsibility of the business owner, it is worthwhile being aware of such matters as a landlord.

Communication is important, as is knowledge, especially when it comes to the who, what and why of your investment property. Your property manager can help navigate and guide you through this process, but it is also wise to seek professional advice if you have concerns.