Home businesses can be problematic

Is your business suitable?

WORKING from home is a growing trend that not only sees fewer people taking on the daily commute but more commercial enterprises operating in, and from, residential areas.

Some businesses, however, are suited to these locations while others might need permission to operate or apply for a property to be rezoned.

With a stressed economy and political issues, downsizing has been a trend in Cape Town across all sectors over the past 18 months, and smaller businesses are reducing their overheads by consolidating their expenses and seeing staff working from home, says Brett Leon, managing director of Lew Geffen Sotheby’s International Realty on the Atlantic seaboard and City Bowl.

Office-type businesses are generally a lot more acceptable in a residential area than a showcase or retail environment – unless the property is correctly zoned as customers visiting home-based businesses are bound to disrupt neighbouring residents which is an obvious conflict of interest.

“Work-from-home business models, however, can work in residential premises if they are small one or two-man operations,” he says.

Sectional-title body corporate structures rarely allow for commercial practice though, and residents operating from such

homes do so at risk of infringing building rules.

Areas like Kloof Street in Gardens and Main Road in Sea Point, that have both strong residential and commercial components, have become popular places for businesses and it can become an “interesting play-off point” or even create conflict between residents and business owners.

“Restaurants have liquor licences and want to maximise their returns, may trade late at night and play music, which will cause conflict with residents. In peak holiday seasons client traffic increases, causing additional issues.”

Businesses with a high staff complement or manufacturing element could upset neighbouring residents.

People or businesses that do not need to engage with customers face-to-face, or which operate online can work in residential areas without problems, says Selwyn Sharon, Pam Golding Properties commercial broker in Cape Town. Some retailers with websites and no actual showrooms can work from home without any fuss.

“Independent consultants, accountants and insurance agents, for example, do not need to work from an office and may opt to operate from a residential property.” But when customer visits are frequent the community “is likely to react” and businesses might then have to apply for rezoning which is expensive and can take six months. Neighbours can object.

“A doctor or vet could operate alone, but if patients cause disruption, use up all the street parking, and ensuing traffic poses a danger to children on bikes, for example, then a departure will be required.”

Residential property buyers who intend to operate a business from home need to check whether the property they are interested in can be used for business or can be rezoned.

“If most of the street has houses already converted to business premises then the chances of rezoning on the same road are very good,” Sharon says.

While built-up areas are popular for small businesses, it is difficult to find houses with business rights in suburbs.

Leon says people usually work from home to consolidate expenses. “Few people want to live and work at the same address.

“This is why co-working spaces have become so prominent, as they cater for the smaller business owner who wants to have a work address separate from their private lives.”