What landlords should know about tenants running a business from their property

People working from home is becoming more and more common these days, with advances in technology and the abundance of jobs in the online sector. The current estimate is that one in four people carry out at least some of their regular work from home. Most of these people in the UK work from their personal computer in their own residence, or run their own business from their home. 

However, what does this mean for landlords who rent out their property to tenants who use it for their business as well as residential use?

What is the difference between residential and commercial tenancy?

A commercial residency and a residential tenancy are very different in law, so if you have a tenant who is carrying out business from your property they will not be covered by your general residential tenancy agreement. It is important to know that there are legal and financial implications associated with using a residential premise as the base for a business.
It is not a criminal offence to run a business from a rental property, so you don’t have to worry about being prosecuted or receiving a fine. However, there are a few important things that landlords should keep in mind about tenants that have a commercial business.

For example, because the laws that govern business tenancies are different to the laws applying to residential tenancies, you could find yourself subject to changes in the law. For example, you could lose the right to recover your possessions, or be unable to get rid of your tenants.

Also, it is important to be aware that renting your property to tenants that run a business could probably be in breach of your mortgage. You should also check your insurance policy, as it might invalidate your insurance. In some cases, you might even be in breach of planning regulations.

Of course it is important to distinguish between a tenant who has a hobby that earns them a little bit of cash and someone who has a full time business that brings in most of their income. Also, if your tenant is a freelance writer who works from a spare bedroom they aren’t bringing increased traffic or clients in, so it shouldn’t be too much of a problem. 

However, a freelance hairdresser or massage therapist who sees clients in the home might cause a few more issues such as parking problems and traffic. 

For more advice and for a quick quote on your landlord insurance visit: www.discountlandlord.co.uk/