# Tenant running company from home.  Is this okay?



## gm88 (22 Mar 2009)

Just found out that my tenant is running a company from my house! 

I'm a bit surprised, and not sure whether it is okay or not. 

It is a registered company, registered at the house address. Are there any implications for me that I should have been aware of? eg. I have house insurance covering the property as a residential tenancy, not corporate.

Maybe I'm over reacting, but I'm just not sure if this is okay or not. 

Any advice or opinions greatly appreciated!


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## mathepac (23 Mar 2009)

No its not as it may constitute a "change of use" (domestic to commercial). Your current insurance does not cover its use as a business premises and in fact its use as a business address may invalidate your current insurance.

As the registered business address, your house will be the contact address for the Revenue, suppliers, aggrieved customers, legal actions, process servers, audits, health and safety inspections and every quango you can think of.


Did your tenant engage in any conversation with you regarding the plans for the address?


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## Smashbox (23 Mar 2009)

Agree with mathe, its a different situation! Talk to your tenants..


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## Bessa (23 Mar 2009)

Hi, your building would also be subject to Rates from your local council. I take it that your lease also states that the tenant is not allowed to run a business from this address. Take this up immediately with your tenant, you do not want to be compensating the tenant down the road.


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## shesells (23 Mar 2009)

Is your house in a managed development? It may also be against development rules if it is. We're currently trying to shut down a public access business operating in a shared entrance block!


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## gm88 (23 Mar 2009)

Thanks for replies.  As far as I knew one went out to work and the second tenant stayed at home.  Now I know why!!  I only found out when I saw them listed in the Golden Pages at my address.  Further searching has revealed he has set up a limited company, run from the home address.

My insurance co has it covered as a rented property, rented to a family.  Obviously I was not paying rates etc. and have no intention of doing so!

Time for a little chat.......


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## ajapale (23 Mar 2009)

moved from  Askaboutbusiness to  Property Investment which is where landlord / tenant issues are discussed in AAM.


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## paulpd (24 Mar 2009)

Isn't there also going to be a potential exposure to Capital Gains Tax down the line should you decide to dispose of your house? Only that portion related to your principal private residence would be exempt from CGT. Not the business element.


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## jhegarty (24 Mar 2009)

paulpd said:


> Isn't there also going to be a potential exposure to Capital Gains Tax down the line should you decide to dispose of your house? Only that portion related to your principal private residence would be exempt from CGT. Not the business element.



How could it be his ppr is it's rented out ?


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## paulpd (24 Mar 2009)

"Just found out that my tenant is running a company from *my house*!"

I assumed that the tenancy was a "rent-a-room" one in the op's main house.

Sorry!


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## superfarney (1 Apr 2009)

Hi, I am having the same problem. I think I'm going to have to ask the tenants to leave. They didn't ask permission to register their company at my property.
Did you get this resolved?


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## Diddles (1 Apr 2009)

Other implications of asking a tenant to leave is that you may not rent it again in a hurry.
Also you will need to get a BER cert before re-renting.
What i see happening now is that the lower your BER rating the less rent you can charge..
If they are a good tenant I would be willing to turn a blind eye


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## shesells (1 Apr 2009)

Diddles said:


> If they are a good tenant I would be willing to turn a blind eye


 
This is not good advice.

For starters there's the issue of rates due to the council for operation of a business. Then there's insurance, most residential policies are invalidated in the case of the unit being used for anything other than a dwelling. Finally there's also a potential planning permission issue for change of use of all or part of a residential property.

You need to check your lease - it should ban the use of the unit as anything other than a single residential dwelling. After that you should seek legal advice. You should not be put in a position where these tenants leave you with liabilities.


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## Diddles (2 Apr 2009)

shesells said:


> This is not good advice.
> 
> For starters there's the issue of rates due to the council for operation of a business. Then there's insurance, most residential policies are invalidated in the case of the unit being used for anything other than a dwelling. Finally there's also a potential planning permission issue for change of use of all or part of a residential property.
> 
> You need to check your lease - it should ban the use of the unit as anything other than a single residential dwelling. After that you should seek legal advice. You should not be put in a position where these tenants leave you with liabilities.


 
Shesells,
Thats just my opinion.I presume they are still actually sleeping in the house, so does that mean that anyone that has a registered ebay business for example and works from home is also in the same situation as regard rates/insurance/planning as you have outlined above?


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## mathepac (2 Apr 2009)

shesells said:


> This is not good advice...


 Agreed


Diddles said:


> ... so does that mean that anyone that has a registered ebay business for example and works from home is also in the same situation as regard rates/insurance/planning as you have outlined above?


Very likely, the issue in this thread being that tenants have created problems for the landlord, without his / her prior knowledge or consent; if people choose to run a business from their own properties, and create problems for themselves, that's a different matter.

BTW there is a vast difference between working from home (phone calls, internet access) and running a business at home (web-site hosting, customers calling to the door, receiving deliveries, packaging product, shipments out, etc.).


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## krissovo (3 Apr 2009)

mathepac said:


> BTW there is a vast difference between working from home (phone calls, internet access) and running a business at home (web-site hosting, customers calling to the door, receiving deliveries, packaging product, shipments out, etc.).



Thats a good point to consider he may like me be a consultant or a contractor and its registered only for tax purposes.


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## jhegarty (3 Apr 2009)

krissovo said:


> Thats a good point to consider he may like me be a consultant or a contractor and its registered only for tax purposes.




Exactly. I think a home office is usually not an issue for insurance / planning.

But if customers are calling , that's a whole different thing.


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## Diddles (3 Apr 2009)

Think we better find out for GM88 what type of a business is being conducted at the premises before we speculate any further


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## mathepac (3 Apr 2009)

Diddles said:


> Think we better find out for GM88 what type of a business is being conducted at the premises before we speculate any further


It's irrelevant what kind of business; the tenants have no permission from the landlord.


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## seanclon (28 Dec 2009)

what did you sell tenant in first instance == a private residence for residential use for which the tenant would pay rent;  anything after that is a different matter and should be dealt with either with two eyes open or a blind eye; if you have a good legal consultant talk to them ; bases on the facts; business type etc you will be aable to for, an opinion; if not revert to my opening comment


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## j26 (28 Dec 2009)

shesells said:


> This is not good advice.
> 
> For starters there's the issue of rates due to the council for operation of a business.



Any decent lease should make the tenant liable for rates, if payable.


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## shesells (1 Jan 2010)

Surely any decent lease should not permit operating a business from a rented residential unit?


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