The distinction between residential and business use of a property can seem unclear at times; this is especially true since the Covid-19 pandemic and the rise in home working, but it had arguably already begun with the growth of certain self-employed business activities in recent decades.
Nonetheless, it is important to note that residential and commercial premises are traditionally treated as separate property types in a variety of contexts. For this reason, well-written contracts such as the OpenRent AST are very likely to include limitations on what business activities tenants are permitted to carry out at properties let under residential tenancies.
Where jobs that are normally office-based are simply being carried out from home, especially when required under coronavirus restrictions, this is unlikely to cause problems. However, actually registering or running a business at a residential address could in some scenarios cause issues in a number of areas, including:
- Mortgage terms
- Superior lease terms
- Insurance (e.g. buildings & contents)
- Planning permission
- Disturbance or nuisance to neighbours
- Local authority licensing requirements for specific activities
- Council tax and business rate liability
Before agreeing with a tenant to allow them to carry out any business activities at your property, we strongly recommend checking with your mortgage and insurance providers and head lease agreement (where applicable) to make sure none of these will be affected, and satisfy yourself that there will be no other unwanted knock-on effects.
If you are unsure on any of these points, you may wish to clarify with third parties (e.g. your local authority) or take independent legal advice on the matter.