Advertisement
Since the coronavirus pandemic, working from home has now become an everyday part of life but it has created challenges for community housing schemes like residential estates and the homeowners’ associations that manage them.
If you’re thinking of starting up a side hustle from your spare room or setting up your business in your garage, make sure you follow these steps first.
Do your research
Essentially, an estate should only be used for residential and leisure purposes but some HOA’s will accommodate certain home enterprises, especially the larger ones. Arm yourself with the facts first.
Research local municipal regulations and read up on the memorandum of incorporation within your own estate to better understand the types of businesses which are likely to be accepted. A car wash or spray painting operation for example may be a complete no-go.
Advertisement
Research the competition rules. It is unlikely that you will be granted permission to set up a yoga studio from your home, if the estate already has one on site.
State your case
You will usually have to make a formal application to the board of directors, who will consider each case individually to ensure everyone’s interests are protected. This is your chance to explain the nature of your business, and how you will comply with the rules of the estate and the municipal by-laws.
If you want to move your hair salon from the local mall to your home, then give solutions to the increased traffic and parking issues that may arise from this. (Perhaps you will only operate on certain days and during quieter times and stay closed over the weekend). If, on the other hand, you want to set up an online jewellery business, then explain that this won’t interfere with the aesthetic appearance of the neighbourhood or creates noise, smells or dust etc.
Adhere to the rules
Once you have been given the green light by the HOA, make sure you stick to the rules that they stipulate as a breach could result in the HOA issuing legal proceedings against you.
In most cases the rules govern how much of the built floor area can be used for non-residential purposes (usually no more than 25%) and that the business owner must also be a permanent occupant of the home. There may be a limit to the number of people who may work at the business so check this before you start recruiting for new staff.
Make sure you are insured
‘When starting a business at home, it’s important to notify your insurance company. Your policy may need to be updated to include new home contents and business-related risks which we think could impact your level of cover and the cost of your policy,’ says Ferdie Muller, products projects and insurer relationship manager at FNB Insurance Brokers.
Although a large portion of personal policies include some home business, they are subject to various conditions so it is important to review any existing policies with a broker to make sure that you are adequately covered.
‘The type of cover you need for your home-based business will depend on your business and the service you will be providing from your home. Liability insurance would be important if you have clients coming to your house. The stock and electronic equipment needs to be specifically insured for this purpose,’ he says.
In the case of the online jewellery store, you may have to stock hazardous or flammable materials, which will require specialist cover.
A lack of insurance can be detrimental to business survival – one small loss can cause the entire operation to shut down. ‘It would be wise to have the minimum cover in place to ensure that when an accident or loss occurs, you can be placed back into the same position and continue operating,’ says Christelle Van Den Berg, head of broker channel at Nedbank Insurance.
