Running a business from a rental property

Are you allowed to run a business from your rental property and on what grounds could your landlord refuse? Here's what you need to know.

In this day and age, many people are opting to work from home, either alongside work elsewhere or as their primary means of income.

As of 2014 there were nearly three million home-based businesses in the UK, but the number of people renting has also risen.

With home ownership at a 25-year low, many people are asking - can I run a business from a rented property?

The short answer is yes, you can run a business from a rented property, but there are various rules and regulations that govern what you can and can’t do, and what permissions you need to obtain.

Residential vs. commercial property: what does the law say?

According to the law, there is a distinction between residential premises and business premises, but in recent years the government has decided to tackle the ever-blurring line between the two.

In 2015 the Small Business, Enterprise and Employment Act was introduced, which gives tenants the right to work from residential properties, provided the property remains a residence first and foremost, and that the landlord has given their permission for the property to be used as such.

Negotiating with your landlord

If you work elsewhere and sometimes bring papers home from work or have days where you work from home, you don’t need to inform your landlord, but if you’re looking to run a business from your home, then you will need your landlord’s written permission.

Fortunately, the Small Business, Enterprise and Employment Act stipulates that a landlord’s consent to the running of a business in their property must not be “unreasonably withheld or delayed”.

Three reasons you could be refused

So you know that it is possible to run a business from a rented home, but what might your landlord think is a reasonable cause to withhold their permission? Well, there are three main reasons.

1. It looks like a commercial let

The first is also part of the law, and this is if they think your business proposition might mean the let should be commercial instead of residential. Again, as the lines are blurring more and more, it’s hard to pin down what definitively counts as commercial instead of home business, but examples that have come up in the past include installing specialist equipment, such as walk-in freezers or sinks for hairdressers.

2. Excessive wear and tear

The second reason they might refuse is if they think it will cause excessive wear and tear to the property. If you’re a home-based childminder or someone who works with animals in some capacity, this could be a problem, as well as if you use potentially harmful chemicals.

3. Nuisance to neighbours

Finally, the third reason is if your business operations may cause nuisance to the occupants of neighbouring properties.

This could be in the form of loud noises, but it might be something less obvious such as having hours of operation that are late at night, or bringing significantly increased footfall to your property. This could be a worry for anyone whose business requires clients to visit their home.

Computer-based home businesses are usually ok

On a positive note, if your business is largely or entirely computer-based - if you’re a writer, web designer or translator, for example - then it’s almost certain your landlord will approve your application for home business, as it does not fall under any of the three clauses above.

Do you run a business from a rental property? Tell us about your experiences below.