Many Americans have turned to side hustles or completely changed how and where their brick-and-mortar business operates during the COVID-19 pandemic. Across the country, a growing number of pet groomers, hair stylists, fitness instructors, daycare workers, and entrepreneurs have set up home businesses, posing a challenge to community association restrictions.
Generally, community associations have the right to restrict home businesses through provisions in their governing documents designed to maintain the residential qualities of the community. There also are times when state and local regulations may come into play.
Some community association leaders are trying to be more flexible with restrictions on home businesses, while others say it’s time to revisit rules and see whether they need to be modified to reflect today’s modern business and economic environment.
Jan Skopecek, treasurer of Spring Lake Estates Homeowners Association in Trafalgar, Ind., says the community of 142-single-family homes south of Indianapolis has seen businesses emerging among residents working to replace lost income due to reduced hours or unemployment. In addition to word of mouth, the board often becomes aware of the ventures as the residents advertise or post information on social media.
Spring Lake Estates’ covenants currently state homes are strictly for residential use, but members were considering an amendment that would allow home businesses with several restrictions on equipment, smells, fumes, or vibrations outside the home.
Henry A. Goodman, an attorney with Marcus, Errico, Emmer & Brooks in Braintree, Mass., and a fellow in CAI’s College of Community Association Lawyers, says there haven’t been many problems with home based businesses in the more than 4,000 Massachusetts, Rhode Island, and New Hampshire townhome and condominium communities his firm represents. He did have to write a letter to the owner of a Cape Cod, Mass., condominium who was apparently advertising and selling clothing from her residence after her brick-and-mortar store was shuttered during the initial lockdown.
“This business was bringing in people who were parking in other people’s spaces, and there were people traversing over the common areas to the seller’s unit. (The visitors) could have tripped and fallen. There could have been liability issues,” Goodman explains.
He says, even in tough times like these, boards should not look the other way if a resident is in violation of rules designed to prevent packed parking areas, noxious conditions, excessive noise, and other things that might make another home unpleasant or impossible to live in. “A board’s job, as fiduciary, is not to be kind—it’s to enforce their documents,” says Goodman.
CAI encourages community associations to adopt use restrictions pertaining to home-based businesses that are reasonable and flexible and applied uniformly according to objective criteria that are set forth in the governing documents or rules and regulations.
If home-based businesses are allowed in your community – they need insurance as well. We are happy to discuss with residents or homeowners what coverages they may need.
Source: Community Associations Institute
