Running a Web Design Business from a Rented Property

R

retroandy

New Member
Hi guys

I have another startup question. I am curious if anyone has any advice on running a business from a rented property. I know it's in my tenancy agreement about not being able to do it bit I wondered if this was just standard and due to the fact my business is effectively just working from a desk and not serving customers in my home it might not apply

I have no choice but to rent at the minute and as a start up company I cannot afford any business premises yet.

Thanks.
 
retroandy said:
I have no choice but to rent at the minute and as a start up company I cannot afford any business premises yet.
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Might be a time to 'seek forgiveness not permission' and apologise if you get rumbled. As long as you hold meetings etc away from your home I reckon you'd be OK for a bit.
 
I wouldn't be too worried. My last 3 rented homes over the past 5 years have all said the same thing.. and I've worked from home anyway. Like you said, it's not like you'll be inviting clients round for meetings, or having stock delivered, or employing staff, you're simply working from a home office.
 
I did it years ago and just put my parents address on the invoices and communications.

That way there was no paper trail back to the rented premises.
 
hankscorpio said:
I did it years ago and just put my parents address on the invoices and communications.

That way there was no paper trail back to the rented premises.
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This sounds like a good option: your business address and the place you actually do your work are easily seperated - and if you're home all day, that's actually of some benefit to your landlord in terms of security and the like. As things develop, you might want to look at a local business centre or similar for a registered address but, for the time being, just make sure you're not misleading anyone or placing anyone in any legal jeopardy.
 
Both myself and my partner work from our rented home. Despite the tenancy saying we can't, the landlady is fine with it so long as we don't have clients/customers visiting the premises. She says it's because landlord buildings insurance for domestic properties won't cover commercial use (ie; running a shop from the front room) but 'clerical work' such as preparing your accounts or other desk based duties are usually overlooked.

When you go for a contents quote, you'll also find your insurance company will ask you if there's any business run from the premises, what the nature of the business is and if it includes visits from customers.
 
You absolutely need to advise your landlord from a point of view of protecting your interests should the worst happen. The landlord will have "landlords property owners insurance" and part of that may stipulate "domestic use only" - so if there is a fire or something that causes a total loss, then the loss adjusters will start to investigate - finding you are running a business (albeit clerical only) could invalidate the landlords insurance policy and they may repudiate the claim - and then the landlord will be coming to you personally for his loss and that as you can imagine could prove a long and costly process.

As long as the landlord &/or his insurers are aware of the situation now, then I wouldn't think it will be a problem, as the work isn't manual and there are no visitors to the premises, but you need to tell him for your own protection.

Hope that helps.
 
Telling them could potentially violate your lease agreement, and effectively give the landlord an excuse to expel you from the premises at any time!

Telling them won't do anything to change their insurance arrangements whatsoever.


Bottom line is, lots of people do it, nobody talks about it.
 
hankscorpio said:
Telling them could potentially violate your lease agreement, and effectively give the landlord an excuse to expel you from the premises at any time!

Telling them won't do anything to change their insurance arrangements whatsoever.

Bottom line is, lots of people do it, nobody talks about it.
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Well as you are already violating the lease agreement, then you are on pretty dodgy ground to begin with - its not hard to find a business operating on the internet is it ? However by telling your landlord and his insurers you will be in a much better position going forward - you have no way of knowing what insurance arrangements the landlord has made and what clauses and conditions are in force. By operating a business (no matter how small) you could invalidate the policy. Not disclosing a "material fact" is something on every insurance policy, one that gives the insurer the chance to cancel/void all cover - I wouldn't want to risk it - would you ?

Yes lots of people do it and nobody talks about it, but that doesn't mean it is right or the way you should do it either.
 
Basically, you sign an agreement with the landlord under contract not to run a business from the business.

If you violate the contract then the landlord is in the clear regarding insurance, as you violated your contract to run a business.

Therefore, the landlord is not responsible for any damage to your property during your stay there, as it was effectively being used as a business property, violating the original agreement.


Therefore, you'd be evicted if you told the landlord. Or, you assume the risk of running a business from your rented property, and if during some emergency with the property it's transpired you ran a business from your property then the landlord doesn't have to pay you diddly squat.


Telling the landlord is the last thing you want to do.
 
hankscorpio said:
Telling the landlord is the last thing you want to do.
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Nope, I cannot agree at all with that.

I am not talking about damage to your own property here - the issue here is if the premises burns down or suffers major damage for whatever reason, but especially if it was something connected to your occupation. Following a loss adjuster enquiry the nature of the business would be uncovered and the insurers could invalidate the property cover for the landlord. You (the tenant) haven'd disclosed that you were running a business and guess what happens next - the landlord will be after you through the courts - do you have £100-£200k spare to rebuild his property - it may sound stark and unlikely, but believe me, I have seen similar things time and time again.

If you are running a one-man operation as a website designer, there is no way the landlord would evict you - why would he? It's just a case of him being able to dot the i's and cross the t's with his insurers.

Non-disclosure and lies are NOT the way forward. At all.
 
hankscorpio said:
... Telling the landlord is the last thing you want to do.
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Strictly speaking, it's the first thing you want to do.

The simplest solution - as has been said - is to work at home without conducting a business from there by registering your interest at a different, legitimate postal address. Work for most of us here is sitting in front of a computer (materially no different from browsing the internet) and there's no way that that in itself is going to violate any agreements or invalidate policies.
 
DesignersInsurance said:
Nope, I cannot agree at all with that.
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That's just taking it out of context - I am saying the landlord has the power to evict you at any time if you disclose you are running a business, as that is a violation of the contract.

DesignersInsurance said:
I am not talking about damage to your own property here - the issue here is if the premises burns down or suffers major damage for whatever reason, but especially if it was something connected to your occupation. Following a loss adjuster enquiry the nature of the business would be uncovered and the insurers could invalidate the property cover for the landlord.
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Just how would an inquiry uncover a business being operated from the rented property if it's, as you suggest, just web design or graphic design?

Yes there are some businesses that can be run from a property that can damage the property, but a laptop/printer/router etc. catching fire and burning the house down wouldn't be cause for any sort of serious investigation.

DesignersInsurance said:
You (the tenant) haven'd disclosed that you were running a business and guess what happens next - the landlord will be after you through the courts - do you have £100-£200k spare to rebuild his property - it may sound stark and unlikely, but believe me, I have seen similar things time and time again.
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It's possible that could happen. But we're talking about working from home as a graphic designer. Not running a prostitution ring, or a selling flammable items over the internet, or having deliverey trucks/vans interfering with the property.

DesignersInsurance said:
If you are running a one-man operation as a website designer, there is no way the landlord would evict you - why would he? It's just a case of him being able to dot the i's and cross the t's with his insurers.
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It's not a case that they would evict you, they might be ok with it. But if at any stage they decide that you they don't want you in the premises anymore they have the power to evict you, based solely on the fact that you admitted to running a business from it.
 
It's clearly a double-edged-sword

1. Don't tell your landlord, and assume the risk that if the place burns to the ground you find yourself out of pocket up to the tune of a new property

2. Tell your landlord that you are running a business from the property - and then face the possibility that you can be evicted at any time for violating your rent agreement.


3. Do what I did, register your business at your parents address, or a friends address with their permission.


That way, if you're working from the rented property, instead of the registered address for your company, you can say that you were working from home (which is your rented property).

And there's nothing in any rent agreement for residential property, that I've ever had, that says you cannot work from home (which is technically your rented residential property).
 
hankscorpio said:
... Just how would an inquiry uncover a business being operated from the rented property if it's, as you suggest, just web design or graphic design?
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Any possible reason to avoid paying out on a claim will be explored by an insurer and they'll start with anything specifically excluded in the terms. Doesn't matter what the application of shades of grey or common sense might produce; anything that can invalidate a claim will be used as justification for denying a payout. This would inevitably lead the landlord to his next course of action which would be violation of the terms of the let - and, in all likelihood, s/he'd win in court on account of the fact that the tenant could easily be proved to have been in violation.

It's an unlikely scenario and all that but unlikely scenarios play out everywhere all of the time.
 
Absolutely - there are scenarios that would go against you.

You can't run a business from a rented property, it's in the lease contract.

Tell the property owner and you could potentially be evicted - as unlikely as it is.

Burn the place down and the property owner could potentially sue you for running a business from the rented property and violation of your lease contract.

Don't tell them, and the insurance company doesn't pay the property owner, the property owner then sues you.


Either way - you're getting sued or evicted.
 
My landlord should be more concerned about the moonshine I'm brewing in my airing cupboard to be honest…
 
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