The Residential Only Restriction In Condominium Association Documents And Unit Owners Telecommuting From Their Units

Jul 18, 2011 By Shaun Marker Condominium Associations

Telecommuting is a work arrangement in which employees enjoy flexibility in working location and hours. For them, the daily commute to a central place of work is replaced by cyber communication links. According to Wikipedia, estimates suggest that over fifty million U.S. workers (about 40% of the working population) could work from home at least part of the time. Some may work from home occasionally, while others may establish a home-based business. For many, homes are the most convenient and cost-effective workplace, particularly in this economic crisis. Homeowners in condominium associations may be subject to restrictions—or potentially even a total ban—on business use of their homes if the association has a residential restriction in its governing documents that prohibits the use of residential units for commercial purposes.

The logic behind banning such home-based businesses stems from decades ago when the dispute often involved activities easily identified as businesses, such as music schools, day cares and professional offices. Controlling business use is important for condominium association boards and managers. It prevents operations that could put an undue burden on the association’s common elements, cause an increase in common expenses, increase risk or hazards, or create noise, odors, or other nuisances that interfere with other owners’ enjoyment of the community.

Because of the nationwide increase in the number of home-based businesses, some associations may consider lifting or easing restrictions on owners who want to use their units for certain business purposes. The nature of the commercial use may be a deciding factor in whether an association agrees that a business use is permissible. For example, businesses like day care centers, catering operations, and professionals who see clients in person may have the potential to congest parking, over-use utilities, create noise and even increase the potential for insurance claims. On the flip side, telecommuters’ home-based businesses may often be hard to detect and relatively unobjectionable, making enforcement of a total ban difficult.

Completely banning home-based businesses may impact potential buyers. If potential buyers must work out of their home, they would not purchase a unit. Some associations utilize surveys or application forms to determine whether owners’ or prospective owners’ proposed business use is appropriate for the community.

Condominium boards and managers considering less restrictive policy on business use of units are strongly encouraged to consult with counsel and insurance professionals regarding the potential impact such an adaptation could have on insurance policies available for the association, as well as property and liability insurance coverage.

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