Summary

Occasionally, an occupant may seek permission to operate a business from their unit. This can be anything from music lessons, fixing cars in the garage, cooking meals or providing home day care.

In all cases, the occupant must comply with the Shire regulations in the first instance, but where the Shire give permission and there is a conflict with the scheme by-laws or there will be an increase in consumption of common utilities such as water, the Council of the Strata Company may wish to act. 

Impact on other residents

The biggest consideration for the Council of the Strata Company is the likely impact on other residents. However, it needs to be remembered that the Strata Company can not stop an owner from carrying out legal enterprises within their lot, unless the resident is breaching the By-Laws or another Strata regulation.

Thought should be given to business' operating hours, parking, access to secured areas of the complex and the additional people using the common property (both wear and tear and additional cleaning). It would be advisable to request business plan before the Strata Council give authority and consider some of these factors.

Other considerations

Shire Permission
Residents may seek permission to operate a business from the local Shire. In some cases, approval is granted without any consultation with the Strata Council. The Shire is under no obligation to inform the Council of the Strata Company that they are giving approval. The Shire may give approval on condition that it is approved by the Strata Company, but this approval is never requested and the business activities commence. Other owners can contact the Shire to lodge an objection if they need to.

Insurance
Any business will need some sort of Professional Business insurance, and it's a good idea to notify the insurer of the Strata Company about the business activity within the residential complex . This may increase the annual premium, or they may put an exclusion on the policy in relation to the business being carried out. Commercial insurance tends to carry a higher risk and therefore, premium. If there is premium increase which is linked directly to the business activity, it may be passed to the owner.

By-laws
The by-laws (or Management Statement) may contain some reference to carrying out a business activity or having clients visit the scheme. They by-laws may set out an approval process and reasonable grounds for having the permission (if granted) revoked.

Example Story

A local Shire had given approval for tenant to run their company from the property. The Council of the Strata Company was never consulted. The business was receiving and distributing books which sounds quite innocuous. You would think there will be no customers so no impact on residents.

However, they used their garage to store the books, which meant that they parked their cars in the visitors bays.  

On distribution day they would have friends/employees packing up books in the garage until all hours of the night, they would then block the common driveway for half a day whilst they loaded up their cars ready for deliveries.  The delivery truck kept parking on the verge and breaking the reticulation popups and damaging the bricks in the driveway entrance.

Just some of the points that the Council of the Strata Company should consider if they were to be asked for permission to operate a business.