Check zoning rights before purchasing property for business
Category General News
Some properties are advertised as being ‘perfect home offices’ or ‘ideal for business’ on a property website or estate agent’s listing. However, this can be misleading as certain residential areas are restricted from commercial use, and so running a business from home could be against the law.
Conveyancing attorneys should double check the zoning rights when handling property transactions, but if a buyer only decides to run a business from their house after the transfer has taken place, then it is up to the buyer to know about their zoning rights.
It is also important to note that people who work from home and don’t receive clients, such as freelance writers, web developers and graphic designers may not be affected by zoning rights. However, business owners who receive clients such as spa owners, lawyers and dentists will have to check their zoning rights before operating a business from a residential area.
What are zoning rights?
The Zoning Scheme Regulations were set out to govern which areas are suited to residential use and which are better for commercial use. The aim is to maintain a systematic and rational development of the land and to govern how that land is used in certain areas. These regulations also balance the competing rights and interests of businesses and private residents.
Part III of the Zoning Scheme Regulations defines the use zones and determines how properties in those zones may be used (i.e. for residential or commercial purposes). Regulation 3.11 allows for the practice of a profession from a private residence. Designers, lawyers, doctors and architects often choose to run a business from their private residence as it is a more viable option for them.
Responsibility for checking zoning rights
Estate agents sometimes advertise a property as being suited to run a home business, but this may be reckless on their part if they haven’t checked the zoning rights. “Often estate agents will be told by the seller that the commercial rights are sound and will not do their own due diligence and check the facts,” says PJ Veldhuizen, CEO of Gillan & Veldhuizen Inc.
“Estate agents and sellers could find themselves in trouble as a complaint could be laid at the Estate Agency Affairs Board and, furthermore, a claim may lie against the seller due to a fraudulent misrepresentation,” he adds.
Can a property be rezoned?
It is possible to rezone a property but to do this can be a lengthy process that requires the services of a town planner and an attorney. The approval for rezoning can take a long time, during which the business owner will need to operate their business from another location.
The best way to avoid contravening the zoning regulations is to request the title deed of the property once the purchase has been made. Secondly, the buyer must check the zoning rights on the city or town's zoning map, regardless of their profession as a precautionary measure.
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Author: Berman Brothers