Home Businesses May Face Zoning Pitfalls

You have a million dollar idea.  You quit your job, develop a business plan, design your logo and launch your website.  Then, just as you hang your shingle on the door of your home office and welcome your first customers, you get a call from the local zoning board, informing you that operating a business out of your home is prohibited and not only must you close shop, but you also face steep penalties for conducting business without the proper permits.

Unfortunately, zoning laws can upend the plans of the most well-intentioned entrepreneurs.  Further, deciphering what rules apply to your home can be difficult since zoning ordinances vary by state, county and even neighborhood.  The only way to know if your home-business will pass muster is to check with the board well in advance of launch day. 

First, you will need to figure out which zoning board governs your fate and this isn’t always crystal clear.  Both cities and counties have zoning boards and you will need to call the boards for your zip code to figure out which board has the final say.  Some business folks will face additional challenges if they live on federal property, on protected land, or in a development with covenants that prohibit home businesses. 

Second, the type of business you own will play a large part in whether you will be able to obtain a permit.  Zoning laws were enacted to protect residential neighborhoods from the activities inherent in commercial areas such as high traffic, noise, prominent advertising and ongoing construction.  Therefore, a home based consulting firm where all work is web based is viewed vastly different then a business where customers are streaming in and out of the front door at all hours of the day.

A key factor is whether the zoning board will consider your business “retail.”  And, unfortunately, some zoning boards have an expanded definition of “retail” that includes online sales and the presence of an occasional customer.  In some neighborhoods, all “retail” business is strictly prohibited, while other neighborhoods have a more relaxed policy.  The same applies for manufacturing or construction businesses that may cause pollutants or cause a nuisance with an elevated noise level.

Third, and most frustrating, is that fact zoning polices and guidelines can change.  There have been several cases where a business is issued a permit, only to be told a few years later that either the definition of “retail” has changed by the board, rendering their home business impermissible, or the board is banning all commercial activity in a certain neighborhood.

If you are denied a permit, there is always the possibility of an appeal.  Most zoning commissions have in place an appeal process where a business owner, along with his or her attorney, can navigate the system with a well planned argument on why a permit should be issued.

The bottom line is that the zoning board should be your first call after the million-dollar idea pops into your mind.  Be sure to have your permit in hand before you open shop from the comfort of your couch.

Bergstrom Attorneys represents clients in a variety of zoning related matters and in the creation of new businesses.  Contact us to discuss your questions.

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