News & Advice Commercial, Trending

sectional title home

The sluggish economy and declining employment over the past few years have prompted an increasing number of people to start their own businesses as a way of earning an income, and the latest available statistics indicate that at least 10% of South Africa’s working adults are now self-employed.

“And of course most of these small or micro-business owners can’t afford to rent an office, shop or manufacturing space, so their enterprises are almost by definition home-based,” says Andrew Schaefer, MD of leading national property management company Trafalgar.”

“In addition, an increasing number of those who are in employment have been enabled by technology to work from home and are choosing to do so most of the time now rather than commute to an office every day.”

However, he says, establishing a home-based business or full-time home office in a sectional title (ST) scheme can be problematic, and owners must be sure to do things the right way or they could find their fledging enterprises grounded for good.

“It is clear from the Sectional Titles Act that a flat or townhouse is intended for residential use, and generally cannot be used as an office or place of business – unless the owners of every other unit in the ST scheme agree in writing to a change of use. This means that owners who have not secured this consent can be told by the trustees of the scheme to immediately close their home-based businesses or face legal action.”

“On the other hand, times and lifestyles have changed so much since the Act was introduced that we as managing agents always encourage owners  and trustees to consider change-of-use applications very carefully rather than just rejecting them out of hand. Running a home-based business may be the only way for a fellow-owner to earn a living and keep up his levy payments, for example, so agreeing to him doing so may be in their own interests.”

Schaefer says that, as in many other ST matters, there is likely to be a high degree of subjectivity involved in consideration of a “change of use” application, but that there are three main factors that the members of the body corporate can use to guide their decision to grant or withhold permission.

“The first of these is noise, and on that basis, an accounting or computing business is a whole different proposition to a vehicle repair or woodworking business, for example.”

The next thing for the other owners to think about, he says, is the possible inconvenience or “nuisance” the business may cause, particularly in regard to security and parking.

“So if the business is a delivery company, for example, or a service enterprise like a cleaning or catering or recruitment company that would involve staff or customers coming and going all day, consent might not be a good idea. Having said that, though, a teaching or coaching business that only attracts one customer at a time or a professional business with only one or two regular employees might not cause the other owners in the scheme any inconvenience at all.”

Schaefer says the third factor to consider, with particular regard to advertising and signage, is the provision in the prescribed management rules for ST schemes that prevents owners or residents from doing anything that might harm the ‘reputation’ of their scheme.

“Owners generally don’t want their ST scheme to lose its residential character and end up looking like an office park or a mini-factory complex with many signboards advertising the various businesses that it houses – and quite rightly so, as that would most likely have a negative effect on the value of all homes in the scheme.”

“Consequently, even if they do approve the change of use and establishment of a home-based business, they may want to veto the placement of any advertising material or signage for that business anywhere on the common property.”

This article “Can You Run A Business From A Sectional Title Home?” was issued by Trafalgar Property Group.

Leave a Reply

You might also like...

3 Security Considerations When Renting A Property
Ask These Questions When Buying A Flat
Aspiring Landlords – What You Need to Know
Repo Rate Cut: Encouraging News For Home Buyers
Is Now The Right Time To Upgrade To a Bigger, Better Home?
Why Creditworthiness Is Just As Important For Tenants
Is Investing In Property During The Recession Still A Good Idea?
28 Important Questions To Ask When Buying Property
Is Hosting Your Property On Airbnb Legal?
5 Easy Ways to Sell Your Home FAST!
Divorcing And Need To Sell? 3 Possible Options
Unrealistic Expectations Can Sour Relations With Agents
Poor Economy Affecting South Africa’s Property Market
Does The Property Market Still Need Estate Agents?
New Landlords Need Experienced Agents
Make Your Bond Work For You
The Perils of Rising Consumer Debt For Landlords
The Gap Between Asking and Selling Price Widens
First-Time Home Buyer? How To Avoid Tax And Get Up To 44% More Space
Is Now The Right Time To Upgrade To a Bigger, Better Home?
Is Investing In Property During The Recession Still A Good Idea?
28 Important Questions To Ask When Buying Property
3 Most Annoying Things About Buying A Home (And How To Avoid Them!)
House Hunting: How To Get Over The One That Got Away
Factors To Consider When Letting Out Property
7 Deadly Sins to Avoid When Investing in Property
4 Hot Tips For Investing In Student Accommodation
Is Property an Asset or Expense?
Property Buyers Value Lifestyle Over Value-Growth Prospects
How Older Buyers Show The Power Of Home Equity
How To Make Your Offer To Purchase More Attractive To Sellers
How To Find Your Diamond In The Dust?
Essential Questions For Home Buyers To Ask Their Real Estate Agent
Top Tips For Selling Your Home in Winter
5 Easy Ways to Sell Your Home FAST!
Unrealistic Expectations Can Sour Relations With Agents
Cut Your Price and Get The Jump on Other Homesellers
Unrealistic Seller Expectations Contribute To Declining Sales
Key Aspects And Features That Sell Homes
Lightstone predicts a buyer’s market for 2017
House Won’t Sell? Here’s What You’re Doing Wrong!
Factors that determine property value
Create Home Buyer Appeal Through Home Staging
Is There A Difference Between Offers?
How To Decide When To Sell
Does My Agent Care About Me Or Just The Commission?
3 Questions To Ask Before Listing Your Home
I Just Bought A Home – Now I’m Unexpectedly Being Transferred
Why Creditworthiness Is Just As Important For Tenants
Factors To Consider When Letting Out Property
New Landlords Need Experienced Agents
The Perils of Rising Consumer Debt For Landlords
First-Time Tenant? What You Need To Know
Average residential rental values on the increase
Is It Possible To Terminate A Lease Agreement Without Recourse?
New Generation Digs Now On The Rise
When Is Your Rent Due?
Gauteng Property Rental Market Forecasts Growth
Keeping Track of Parking On Common Property
How And When To Legally Evict Tenants
The Rental Housing Amendment Act: Waiting For Light In The Dark?
Tenants: Be Aware Of Ongoing Credit Checks
How To Rent With Pets
Divorcing And Need To Sell? 3 Possible Options
5 Mistakes To Avoid When Relocating
7 Tips For Packing And Moving Quickly
Moving? Things To Think About!
Maximising Small Spaces
7 Tips To Help Your Children To Adapt To The Move
What To Do With Your Home When You Have To Relocate
Moving With Pets Can Be Tricky
Estate Agent Moving Tips
Telltale Signs You Need A New Home
Seven Signs You Need A New Nest
Über Wealthy On The Increase And On The Move
First-Time Home Buyer? How To Avoid Tax And Get Up To 44% More Space
Repo Rate Cut: Encouraging News For Home Buyers
Is Investing In Property During The Recession Still A Good Idea?
4 Hot Tips For Investing In Student Accommodation
Make Your Bond Work For You
Energy-Saving Tips For Your Home This Winter
Costs To Consider When Investing In Property
Smaller Properties Yield Great Investments
8 Myths Preventing People From Real Estate Investing
Own Fixed Property? You Need a Will!
Tax Tips for Landlords – What You Need To Know
The Perfect Investment Property
St Francis Bay’s housing market attracting top dollar
Factors that determine property value
Average residential rental values on the increase
Is Hosting Your Property On Airbnb Legal?
How To Protect Your Commercial Property Investment
Commercial property still important asset class for private buyers
Know The Risks Before Building Airbnb Castles In The Sky
Green Buildings Catching On In South Africa
Digital Disruption And The South African Commercial Real Estate Market
Can You Run A Business From A Sectional Title Home?
What’s Driving Change In The Commercial Property Sector?
5 Ways Commercial Property Space Planning Can Save You Money
Investing In Commercial Property an Attractive Option
3 Obvious Signs That It’s Time For Office Relocation
3 Things You Need To Know Before Buying Vacant Land
Price Correction In Commercial Property Market
South Africa: Evolution of Industrial Properties
The Commercial Times Are Changing