Since the pandemic began, working from home has become the new normal. The pandemic has also seen many entrepreneurs taking the opportunity to launch their very own business from their homes.
But what if you are a landlord and rent your home? Can a tenant run a business from your rental property? We’ve looked at the rules surrounding rental homes and running a business from them to see how landlords might be impacted.
Can a Tenant Run Their Business from my Rental Property?
The short answer is yes, providing your tenant adheres to the relevant regulations. The property must remain residential, which often means no more than 40% of it should be used for commercial purposes.
Any tenant that wishes to run a business from a rental property must have the landlord’s permission in writing. Your tenant must also make it clear to you that they are running a business from the property, as well as the nature of their business.
What Changes Might You Need to Make to Your Tenancy Agreements?
If you decide that you are happy for your tenant to run their business from your rental property, there are several things that you will need to consider when drawing up or adjusting the tenancy agreement, including the following:
If you have included heating or electricity bills in the rental price and have only just discovered that your tenant wants to operate a business from your property, you should be aware that your energy bills could be substantially higher. You should therefore discuss this with tenants to come to a suitable and fair arrangement considering the changed circumstances.
Internet costs are likely to be much higher if your tenant is working from home too. So, you should always make sure you are clear about whether the internet connection you provide is for residential or commercial purposes. Of course, you can ask the tenant to set up and manage their own internet services instead of providing this for them.
If a tenant is running a business from the property, it may become subject to business rates. This is something to keep an eye on. However, this is unlikely unless the business involves selling products to people who visit the property, or employees are based at the property.
Professional Property Management
Gordon & Co are expert lettings and managing agents operating throughout the South of London. If you are a landlord and are fed up of the headache of managing or letting your property, then talk to our expert team.
Disclaimer: This blog post is produced for general guidance only, and professional advice should be sought before any decision is made. Nothing in this post should be construed as the giving of advice. Individual circumstances can vary and therefore no responsibility can be accepted by the contributors or the publisher, Gordon & Co, for any action taken, or any decision made to refrain from action, by any readers of this post.