Should You Let Your Tenant Run a Side Hustle From Your Property?



Before allowing a tenant to run a side hustle from your property, knowing what you’re getting yourself into is crucial. You also need to know the tenant’s rights regarding running a business from home.

Is it Illegal for a Tenant to Use a Residential Property for Business?

First, it’s essential to note that there’s a difference between occasionally working from home and basing the entire business on a residential property. Both approaches are legal, provided the property remains primarily residential. That’s to say that no more than 40% of the property should be for commercial use. Most small businesses run from home offices, and it shouldn’t be a problem for a tenant to use your property for business.

However, your tenant should have confirmation in writing that you’re happy to let them run their business from your property. Ensure you’re confident of their intentions before permitting them.

Factors to Consider Before Letting a Tenant Run Business from Your Property

While you can allow a tenant to run a business from your property, many legal factors come into play. Running a business from a rental home has many risks and is likely to conflict the tenancy rules. Running a business instead of using the property for residency may also impact your landlord’s insurance cover and make it void.

Don’t take the decision lightly, and don’t grant permission until you carefully consider the following:
•    Does the council allow tenants to run businesses from residential properties?
•    Has the tenant got the relevant documents and insurance to run the business?
•    If you have a mortgage on the property, does the bank allow business operations on the property?
•    Does the Homeowners Association or any other corporate body that governs the property permit tenants to run businesses?
•    Is the tenant aware that the landlord insurance doesn’t extend to their business?

If you permit the business to run on your property, ensure you amend the rental agreement with a specific clause specifying that business insurance is the tenant’s responsibility. They should agree to ensure the insurance remains current.