Running a business from your property

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    Running a business from your property

    Hi All,

    Leasehold owner wishes to run a massage business from her property. The lease expressly prohibits running a business from property. She claims 'rules' have been relaxed and will fight this in court, and directors cannot unreasonably withhold permission. Could someone please confirm what ground we respectively stand on. I am director of share of freehold co.

    #2
    The only way that rules have in any way been relaxed is that a minor use of home to run, say, a drop shipping, E-bay business, won't trigger planning issues.

    However, a business that involves customers actually calling, will definitely involve planning issues. I think massage parlours are sui generis. They are certainly not permitted for class C3!

    In any case, whilst you could report a planning breach to the council, you are actually talking about interpretation of a contract, and I think there would be a technical breach there, even for the drop-shipping E-bay business. The reason that wouldn't be worth pursuing is that the courts would probably decide that there was no loss to compensate.

    Comment


      #3
      The precise wording of your lease may be relevant, but if it does come down to what is 'reasonable' you will need to consider the type of business and whether or not the business activities would affect other residents.

      If she wants to run the business from home (i.e. store equipment there and administrate the business from home), but no clients will visit her there and the massage will take place in their homes, I would say that there will be little impact on other residents.
      On the other hand, if she intends to have clients visiting her home this might affect other residents, more so in some situations than others depending on how the property is set out, and whether she shares a common entrance with them.

      Other considerations will include:
      1. Whether the council would allow the business to be run from a residential home.
      2. What effect there would be on the block's insurance.
      3. What other residents/leaseholders think.

      Comment


        #4
        Originally posted by leaseholder64 View Post
        . The reason that wouldn't be worth pursuing is that the courts would probably decide that there was no loss to compensate.
        thanks but what do you mean here?

        Comment


          #5
          Macromia,

          The wording is:
          Not at any time to use or permit the use of either the Demised Premises or part thereof for business purposes.

          No reasonableness caveats here I don't think.

          Comment


            #6
            If someone is running an E-Bay drop shipping business from their flat there is no visible change, so there is no impact on anyone. as a result you couldn't sue the for compensation for the breach and it is unlikely that an injunction would be issued, or that any order would be made if you sought forfeiture. Drop shipping means you donj't actually have any stock, and the wholesaler ships direct.

            Running a a business that involves lots of vans or customers turning up, does have a real impact, and especially so if it is also a planning breach. Such a business, although it might not get monetary compensation, probably would justify an injunction.

            Although not always a euphemism for prostitution, a massage business will have a similar sort of strange men visiting at all hours. Prostitution, although legal, is a sort of business that would always result in successful enforcement action.

            However if only the business paperwork is being done in the flat, that would be more like the E-bay drop shipping example, and not something for which it would be worth trying to enforce the lease.

            Comment


              #7
              As much as anything, those clauses simply reflect the planning status of the property.

              The critical question is are the services going to be provided at the flat, or is this just office space.

              Comment


                #8
                Originally posted by dominco View Post

                The wording is:
                Not at any time to use or permit the use of either the Demised Premises or part thereof for business purposes.
                No reasonableness caveats here I don't think.
                Presumably this is from a list of what the leaseholder covenants, and not from a list of regulations?
                It might not make any difference anyway, leases are more likely to include something that allows regulations to be varied than covenants.

                The fact that there is no mention of reasonableness might not necessarily mean that reasonableness doesn't need to be considered. Older leases in particular may contain clauses that are unenforceable or might require consideration regarding whether it is reasonable to enforce them (some other posters are in a far better position than me to advise on this).

                The likelihood is that you can rely on this as an outright prohibition, but if it does go to court you should also be prepared to present a case as to why it is reasonable to refuse.

                Comment


                  #9
                  she confesses herself to a handful of clients visiting per week. she claims that the local council confirms she does not need planning permission for this.

                  Comment


                    #10
                    Macromia,

                    it was the 4th Schedule - Regulations

                    Comment


                      #11
                      Normally, with regulations, there is a provision to allow those regulations to be be changed without changing the lease itself. If so, they can be changed to best reflect the views of the other residents and leaseholders.

                      Comment


                        #12
                        ok thanks. sounds like the first line to adopt then is 'have you cleared it with your directly adjacent neighbours?'

                        Comment


                          #13
                          Does the lease state that the regulations may be changed ?

                          Comment


                            #14
                            Originally posted by dominco View Post

                            ok thanks. sounds like the first line to adopt then is 'have you cleared it with your directly adjacent neighbours?'
                            I would think that the first things would be for you to request full details of what is planned (i.e. Would clients be visiting the property? If so, how many? Haa the council been approached for planning consent? Etc.).

                            Once you have all this information all leaseholders should be approached for their views, not just the nearest neighbours - especially if the lease contains anything requiring the freeholder to enforce regulations (and it is likely that it does).

                            Comment


                              #15
                              Whether the restriction is in the regulations or other covenants is not really relevant. Whilst the way the courts interpret covenants may shift over time, I do not think there is anything which gives them power to strike down as unreasonable a clause prohibiting using a flat for business. It comes down to a question of degree. Planning and landlord and tenant law are two distinct things, but I thing that the criteria for determining whether planning permission is needed are more or less going to apply to determine if any activity is in breach of the covenant.

                              If the lease contains a covenant by the landlord to enforce the covenants against other tenants the restriction cannot be waived without risking the others tenants suing. The regulation could be changed, but that is not advisable. The other possibility is to get all the other tenants to confirm in writing that they have no objection.

                              The first step is to get the tenant to submit full details of her proposals in writing. They should include precisely what services she will be providing, hours of working and any changes made to the flat. When you have the details you can take them to the local authority planning department and ask if planning permission is needed. If they say it is needed you have a legitimate reason for refusing permission. If they say it is not needed you need to give the matter further consideration.

                              Comment

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