Running a business from home

Transcription

1 Running a business from home Chartered Institute of Housing your work is our business

2 2 The Chartered Institute of Housing The Chartered Institute of Housing (CIH) is the professional body for people involved in housing and communities. We are a registered charity and not-for-profit organisation. We have a diverse and growing membership of over 22,000 people both in the public and private sectors living and working in over 20 countries on five continents across the world. We exist to maximise the contribution that housing professionals make to the wellbeing of communities. Our vision is to be the first point of contact for and the credible voice of anyone involved or interested in housing. Chartered Institute of Housing Octavia House, Westwood Way, Coventry, CV4 8JP Tel: customer.services@cih.org Website: Authors: Debbie Larner, Head of Practice and David Pipe, Policy and Practice Officer Copyright: Chartered Institute of Housing November 2010 Registered charity No /R Cover photograph by polarica/istockphoto.com Whilst all reasonable care and attention has been taken in compiling this publication, the authors and the publishers regret that they cannot assume responsibility for any error or omission that it contains. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without the prior error or omission of the publishers.

3 3 Introduction Running a business from home is becoming increasingly common, it is estimated that currently one in four people now carry out some kind of work from home. Historically, some social landlords have tended not to allow tenants to run a business from their home. Often this has been based on a concern that the kind of businesses that could be run from home, such as vehicle repair and maintenance, might cause a nuisance to neighbours. However, as technology has become more accessible, opportunities for other forms of remote working have become more common and the nature of home working has changed. There are many types of business that a tenant could run from home without causing any difficulties. For example, there would rarely be a good reason to prevent a tenant from using their home as an office for an internet or phone based business (except, of course, for any illegal activities). However, the proportion of social housing tenants who work or run businesses from home is still much lower than in the population in general. Only around 190,000 of the 3.35 million selfemployed live in social housing and only 19,000 (10 per cent) of those work from home, or from the same grounds or building as their home. This compares to 18 per cent on average and 24 per cent of those who own their home outright. Many social housing tenancies contain no prohibition of running a business from home, while others permit it subject to the landlord s consent. Despite this, many tenants still perceive social landlords as being unsympathetic towards tenants who wish to run a business and may be deterred from seeking permission in the first place because they believe it may not be granted. For many tenants, such as single-parent families, people with a disability or those in high cost areas where the cost of letting work premises is prohibitive having the opportunity to run a business from home can make a significant difference to their employment prospects. The new coalition government has expressed a strong commitment to supporting tenants to set up and run businesses from home.

4 4 What should social landlords be doing? In order to ensure that you are supporting tenants to run businesses from home, you may want to consider the following: Develop an organisational policy on running a business from home Review the clause(s) in your current tenancy agreement(s) Review what is in your tenants handbook and on your website Actively promote the potential opportunities to run a business from home for tenants Support tenants with information, advice and signposting Ensure you have clear procedures for taking action against tenants running an unauthorised business or a business that causes a nuisance from a tenant s home. Developing an organisational policy on running a business from home When developing a policy, you need to balance the needs of tenants who may want to run a business from home, support the overall aims and objectives of the organisation and consider the interests of the wider community. It is good practice to adopt a policy which actively allows and supports your tenants to run a business from home but which also reminds them of their obligation to avoid any activity that is likely to damage the premises or cause a nuisance to neighbours. If permission is required, the policy should also clearly state reasons why it may be withheld/withdrawn. The policy should: Set out how it links to your wider organisational objectives for example, tackling worklessness, encouraging financial inclusion If permission is required, make it clear that each case will be considered on its own merit Be clear whether the tenancy agreement contains any restriction on running a business from home and, if so, whether permission needs to be obtained by tenants on an individual basis. If permission is required on a case by case basis, set out in what circumstances permission may be refused/withheld. This should not be an exhaustive list as this may otherwise limit your decision making in unusual circumstances Set out the landlord s legal position (e.g. in relation to the approach to individual variation of tenancy clauses) If permission needs to be obtained, set out the internal process for dealing with requests, including how tenants should apply, how they will be notified and timescales for processing requests.

5 5 Where permission needs to be obtained, granting it should generally be a formality with the focus on allowing tenants to run a business from home. However, there may be specific circumstances where it may be considered reasonable and responsible to refuse/withdraw permission. These may include situations where running a business: Is likely to cause a nuisance to neighbours or damage to the property, although such an activity would be a breach of the tenancy agreement in any case Would require major adaptation of the property Has not satisfied the requirements other relevant agencies, for example by obtaining planning permission or a CRB check. Alternatively, it may be appropriate to attach reasonable conditions to your permission. For example, that the tenant obtains the necessary local authority licences and consents. Landlords should consider each request individually, i.e. on a case by case basis, rather than have a blanket list of exclusions. Your default position should be to grant permission unless circumstances suggest otherwise. (If the business proposed requires permission to be granted by other organisations (such as where a CRB check is required) you may want to grant permission subject to the tenant obtaining all other necessary consents.) Review the clause(s) in your current tenancy agreement(s) In principle, there is no need for the tenancy agreement to refer to the issue of homeworking at all. This leaves the tenant free to run a business from the home, just as an owner-occupier or other householder would be. Many social landlords issue tenancies of this kind, and rely on other clauses (e.g. those dealing with noise and nuisance, or damage to the premises) to deal with the rare occasions on which homeworking gives rise to a problem. However, some tenancy agreements require the landlord s permission. There are two ways that such a requirement could be addressed in a tenancy agreement. 1. Require tenants to specifically request permission on a case by case basis, with the onus on permission not being unreasonably withheld. 2. Give express permission that allows you a right to withdraw that permission or impose conditions if problems arise from the operation of the business. Both of these options allow providers to deal with any issues that may arise, but send positive messages to tenants that you will generally allow a business to be run from the home.

6 6 If the tenancy agreement provides that homeworking requires the landlord s permission, it should: Make it clear that you will not unreasonably refuse/withdraw permission for a tenant to run a business from home Set out the circumstances under which you might refuse/withdraw permission Make it clear that each request will be considered on an individual basis Comply with Unfair Terms in Consumer Contracts Regulations 1999 and the Office of Fair Trading s Guidance on unfair contract terms in tenancy agreements, i.e. that although landlords need to restrict use of tenants use of properties in the interests of good estate management, such restrictions should not be unreasonable. As already mentioned, many tenancy agreements used by social landlords do not refer to home working at all, leaving tenants free to run a business from home subject only to the normal restrictions (e.g. prohibiting nuisance to neighbours or damage to the premises) that would apply to any other activity. The model tenancies issued by the National Housing Federation take this approach. Alternatively, the following clauses may be used by landlords wishing to maintain a requirement for permission. Where permission is required in each case: You agree not to run (or allow any other person to run) any business from your home without first obtaining our written permission. We will not unreasonably refuse or delay our permission, but may we attach reasonable conditions that you must comply with. If you fail to comply with any conditions or the operation of the business causes a nuisance or annoyance to other people in the locality or leads to any other breach of this agreement, we may withdraw our permission by giving you written notice. If you continue to operate the business without our permission, you will be in breach of the terms of this agreement. Where permission is expressly granted, but may be withdrawn: We give you and anyone living with you permission to run a business from your home. If the operation of the business causes a nuisance or annoyance to other people in the locality or leads to any other breach of this agreement, we may withdraw our permission by giving you written notice. If you continue to operate the business without our permission, you will be in breach of the terms of this agreement. These suggested clauses need to be adapted to fit the terminology used your own tenancy agreement.

7 7 Practice examples tenancy clauses Oxford City Council: If you want to run a small business from the home property you must first get our written permission. We will not normally refuse permission unless the business could damage the property or cause a nuisance to your neighbours. We can withdraw our permission if we believe your business causes a nuisance. Guildford Borough Council: If you wish to run a business from your home, you should apply in writing to us for permission. Permission will not normally be refused provided the business complies with Planning, and Health and Safety Regulations and, in our view, would not cause a nuisance to other residents. Changing your tenancy agreement This is relatively easy to introduce on tenancy agreements that will be issued to new tenants. However, if you intend to amend your existing tenancy agreement(s) there are specific procedures that you must follow. Secure tenants The Housing Act 1985 sets out how you may change the terms of a secure tenancy. In summary, it says that you must serve a notice of variation. To begin this process you must first serve a preliminary notice: Stating your intention to serve a notice of variation Specifying the proposed variation and its effect Inviting the tenant to comment on the proposal within a reasonable period of time. You must then consider any comments made before deciding whether to go ahead with the variation. The notice of variation itself must state: Details of the variation The date it takes effect (this must be at least four weeks after the notice is served). Once you have done this, the changes will apply to all existing agreements not just new ones. Assured tenants Making wholesale changes to the terms of all assured tenants agreements is more difficult. The existing terms and conditions will determine if and how changes can be made. Your tenancy agreement may state that you can only change its terms by agreeing with each tenant in writing: this can be a large administrative exercise. You may find it easier to publicise to

8 8 your assured tenants that you will agree a change to their tenancy agreement, individually, if they request permission to run a business from home, or just decide not to enforce the provisions of the tenancy agreement. Review what is in your tenants handbook and on your website It is important that tenants considering setting up and running a business from home can easily access information about their rights and responsibilities. Your tenants handbook and your website are two of the first places that a tenant will look for this information. You should make sure that information on running a business from home is available in both of these places. In Plain English, it should set out clearly: Your organisations approach to tenants running a business from home, as determined by your policy How tenants can make a request, if this is required, to run such a business and what the process and timescales are for processing requests. Unlike the tenancy agreement, the tenants handbook is not a legal document and does not need to be written in the same tone and language as your tenancy agreement. The style of language is important. Positive language will help to counter the perception that social landlords do not support their tenants to run a business from home. You may wish to emphasise, for example, that your organisation recognises the benefit of home working and that if permission is required it will not be unreasonably refused. Practice examples information for tenants Fife Council Website: As a tenant you need the Council s permission to run a business from home. We try to be reasonable landlords and provided your business is not likely to cause disruption to your neighbours we try to look favourably on any application we receive. Sovereign Twynham Tenant Handbook: We recognise that many people want to work from home, whether working for their employer or running their own business. If you want to work from home or run a business there, you must get our permission in writing first. South Derbyshire District Council Website: We will agree to the business use (of your Council property) if it is reasonable, providing that you show consideration to your neighbours, do not put up advertisements, and keep us informed.

9 9 Actively promote the potential opportunities to run a business from home for tenants You also have an opportunity to actively promote home working to tenants, rather than waiting for them to ask for permission. This could also form part of your approach to tackle worklessness. Think about the ways you already communicate with your tenants, such as your tenant magazine, and consider whether you could use them to promote your organisations positive approach to home working. You might want to, for example, publish stories about tenants who have successfully set up businesses from their home. Support tenants with information, advice and signposting If there are organisations in your area who can give help and advice to tenants wanting to set up a small business, you should consider also promoting their services to your tenants. Examples of organisations you might want to direct tenants to include: Support and advice centres for local small businesses, such as Enterprise Direct or similar local organisations in your area Local banks who will have sections which specialise in helping people to set up a small business Local Enterprise Agencies Small business networking clubs The Federation of Small Business You could signpost information, including links to relevant websites, in your communication with tenants and also display leaflets or posters in your service centre. This will help tenants considering starting a small business to access useful information and reinforce your message that you are positive about home working. Tenants considering starting a business from home may also need access to welfare benefit advice and guidance. This may be something that you can offer in-house, or be able to signpost to other relevant agencies. You should emphasise that tenants are responsible for ensuring that they obtain and comply with all necessary legal and regulatory requirements. You can assist with this and provide advice/signpost, however it is not your legal responsibility to ensure these conditions are met.

10 10 Taking action against tenants running an unsuitable or unauthorised business from home While it is important to support and encourage tenants to run a business from home, there may be occasions when either permission if required is not sought or granted, or when the business activity breaches tenancy conditions. You must have a clear and documented procedure for dealing with these circumstances. It is important to take appropriate action as soon as you know about a tenant running an unsuitable or unauthorised business from home. If you take no action, in law you may be considered to have given consent by default. Your procedures should also ensure that your response is always proportionate. If you become aware of a tenant running a business that you would normally grant permission for, you would most likely simply ask them to request permission retrospectively. However, if the tenant is running a business that is causing a nuisance to neighbours or damage to the property you will need to ask them to stop and then, if necessary, take action against them. The most appropriate cause of action will depend on the particular circumstances but all tenancy agreements, whatever their approach to home working, will contain clauses allowing the landlord to take action where tenants cause nuisance or damage.