Can I Work Out of My Home?

Complying with Local Zoning Laws

Q: "I live in a gated community, and the association's rules specifically prohibit doing any sort of business out of your home, including selling on eBay! Is that legal? Can they do that?"

A: Yes. Technically (and I hope you're sitting down), just about every home-based business is an illegal business.

You read that correctly: Just about every home-based business (including yours and mine) in the United States today is technically an illegal business. Why? Because every town or municipality in the United States has a zoning ordinance. This is a law (actually, it's a map) that divides your town into sections (called districts), and it dictates what sort of activity is legally allowed in each of those districts. Except for a growing number of enlightened municipalities that have created mixed-use business and residential districts in their zoning laws to specifically allow home-based businesses, just about every zoning ordinance prohibits you from running a business in a residential district. Therefore, virtually all home-based businesses are technically illegal.

So why is it that there are fourteen people working out of their homes on your street and nobody's doing anything about it? Why aren't prisons filled to the rafters with home-based business criminals?

Because, although every community in the United States (just about) has a zoning ordinance, hardly any community has "zoning cops" going door-to-door asking if people are operating illegal businesses. Don't get me wrong— every community that has a zoning ordinance also has a planning and zoning board that interprets the ordinance, issues variances from the ordinance, and so forth. But, generally, your local zoning board has no enforcement mechanism— except one: your neighbors. Local zoning boards rely on the community (that's you and everyone who lives near you) to tell them when violations of the zoning ordinance occur.

Generally, as long as you keep a low profile for your home-based business so that your neighborhood doesn't start looking like a commercial district, you should be allowed to work indefinitely from your home. After all, many of your neighbors are operating businesses out of their homes, and they wouldn't want you finding out about that, either.

The rules are slightly different, however, for gated communities such as yours. Condominium and cooperative boards are free to regulate their members' lives in ways that are sometimes almost tyrannical. It is not illegal or unconstitutional for these boards to ban home-based businesses altogether, and if they do, there's nothing you can do about it. You will either have to rent commercial space outside your home or else use a local UPS Store or other private-mailbox location (see the answer to the next question) to run your eBay selling business, and use your home office only for administrative functions (such as putting up your listings and keeping your accounting books and records) and other office activities that won't arouse your neighbors' suspicions.

Q: "What are some of the things I can do to keep a low profile for my home-based business, so my neighbors don't report me to the local zoning authorities?"

A: When doing business out of your home, it is essential to conduct it in such a way that your neighbors do not turn you in to the local zoning authorities. If your business is conducted in a way that changes the character of your neighborhood, you are likely to get your neighbors riled up. Here are some tips:

• Don't see clients, customers, or vendors in your home. If your neighbors see a line of cars outside your home every day and people lounging on your front lawn waiting to sell you inventory, they will get upset and report you.

• Get a private mailbox from your local UPS Store, and use that instead of your home address as your mailing address for packages and business correspondence.

• Unless you absolutely need them, don't buy copiers or other office machinery that generates a lot of noise. Use the ones at your local UPS Store or Kinkos instead.

• Ship all your items from your local UPS Store or post office. If the local kids can't play basketball on the street because they are too busy dodging UPS trucks going to and from your home, your neighbors will get upset and report you.

• Keep the noise level down at all times—don't run copiers, packing equipment, or other machinery late at night or early in the morning.

• If you have more than one part-time employee helping out with your eBay selling business, it's time to move the business out of the house and rent a "real" office.

Ideally, your home-based business should be invisible to your neighbors. I've been running several businesses out of my home for over ten years now, and most people living on my street don't even know I work out of the home. That's the way it should be.

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