Wednesday, 29 May 2019

Is It Legal to Run a Business From Your Apartment?

Written by Paul Taylor

Reading Time: 3 minutes

With new innovations in technology allowing greater flexibility for workers, the idea of the traditional workplace is shifting dramatically. The Australian Bureau of Statistics has determined that at least 1 in 3 Australians now work predominantly from home. However, working from home a few days a week is one thing, but what if you own your own business? In efforts to cut costs, we are seeing many businesses operate primarily online. Currently, over 1 million Australians run businesses online from their homes. The type of property you reside in is an important factor to consider when conducting your business from home. Generally speaking, it can be legal to run a business from your apartment. However, it depends on a number of factors which we will in this guide.

Body Corporate & Strata Laws

Whilst conducting business from an apartment is not strictly illegal, you should be weary of strata by-laws. Usually the by-laws will prohibit any business being conducted on the premises except for the resident manager’s business. Often, the by-laws will be designed to maintain a harmonious living space and prevent inconvenience to others in the building. It can be difficult to change this position, as doing so will require a special resolution by the body corporate.

However, there is hope for you if it can be established that your business operations do not inconvenience other occupiers. As with many aspects of body corporate law, there is a distinction between what is permitted in the by-laws and what will be excused on the basis that it is just and equitable to allow the conduct to continue.

Ownership versus leasing

Another key element to this question is whether you own or rent the property you wish to conduct business in. The main thing to check if you own your property, is whether there are any covenants or restrictions of use of land in your contract of sale. If you rent, your lease agreement may also bear some contractual restrictions or obligations between you and your landlord. If you are uncertain about your contract of sale or lease agreement, the advice of a property lawyer may be helpful.

Type of Business

The nature of business is changing as rapidly and with that comes new demand for different untapped markets and services. In a diverse professional and consumer landscape, your business may take on a new complexion. This will be a determinative factor in the extent to which you may conduct business from your apartment. If your business is primarily online, then there are going to be less restrictions on you. However, if your business is dependant on routined interactions with clients and other things which may interfere with the communal space of your apartment building, then this may prove problematic to your business venture.

If you are yet to create or purchase your own business, it is important to assess what will be required for it to function well from the start. If you currently own a business and are in a position where property restrictions may limit your growth, it may be worth looking into leasing a commercial space.

Registrations & Licences

Once you have permission from your body corporate or landlord, you can then address any restraints you may face arising from registration and licensing. With some businesses come certain mandates insofar as registrations and licences are concerned. Some of these registrations and licences will incur certain property requirements. It’s important to identify any potential legal contraventions. You can access information on this via the Australian Government Business website.

Tax & Insurance

Finally, there are certain considerations you need to make both in respect of tax and insurance if you were to run a business from your apartment. Information is available on the Australian Taxation Office website in terms of how running a business from a property incurs certain tax implications. Information on the Australian Government Business Website also provides a breakdown of what insurance requirements exist when conducting business from your home. For clarification on these issues, it may also be worth seeking the services of a tax or insurance lawyer.

The extent to which you can conduct business from your apartment will be determined by the above factors. These factors are extremely important to investigate before you start any business endeavour. Running your business from home can help you save costs, whilst also allowing for flexibility in your work schedule.

Don’t know where to start? Contact us on 1800 529 728 to learn more about customising legal documents and obtaining a fixed-fee quote from Australia’s largest lawyer marketplace.

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