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BrianB
(California)

Posts:1748

04/08/2006 10:18 PM
Our CC&R's clearly state that no businesses can be operated from the home. I quote "no gainful occupation, profession, business, trade or manufacturing of any nature or description shall be carried out on or transacted on any portion of the covered property..." I have heard that most HOA's have similar prohibitions. My question: Does this mean the board can fine everyone who babysits, mows lawns for money, sells on ebay, works remotely from home, transcribes medical records in their home, writes novels or magazine articles, or runs a web site development company from their PC? Our neighbor makes windchimes and sells them at craft fairs, and another makes cookies for bake sales, while yet another does folk art and tole painting on wooden items her husband cuts in his garage shop. These are all illegal activities, by CC&R, correct? Does anyone out there actually enforce their "no business" rules?

SamuelB
(North Carolina)

Posts:83

04/09/2006 5:14 AM
Wow, excellent post.... In our HOA, nothing would be done until someone complained. If the complaint were legitimate, the offending homeowner would be sent a letter informing him/her of the offense and offering them an opportunity to meet with the board (or an individual panel of non-board members)to explain their offense. I can almost guarantee you that of the offenses mentioned above (any of them) that if the unit owner were otherwise compliant with dues and no other rules violations, they would be offered a bye (we would not fine them nor make them cease their business).

I fly because it releases my mind from the tyranny of petty things . . . - Antoine de St-Exupéry

EdR
(Texas)

Posts:170

04/09/2006 6:53 AM
I would venture to say that 95% of the homeowners in my assn. have in-home businesses. I will admit that I do too--a part-time cosmetic sales situation and I also provide secretarial assistance to an inspector, etc. all via computer. Now a lot of the airlines are putting in situations where people who work for them are connected via network and make reservations online from home. This is what our assn. did when I was on the board: if there was an inspection or observation and something was causing a problem - if you could see it, taste it, hear it or smell it, then it was a business that would cause problems for your neighbors and we started out with a cease and desist letter. Something like pool chemicals stored for their business and moved in and out of their trucks, etc. is a problem (they could be seen when the garage was open and in the back of the trucks was the problem). Also, for example there was a house that was being rented and the renters had a seasonal business where with three garage doors open they were cutting out huge wood seasonal decorations for yards at the holiday. The noise from the saws, the big trucks (several) on the street ready to haul the product, the huge amounts of trash (not in the contract for the garbage company to pick up anyway), early morning loading and noise, etc. got them an injunction (the actual owner of the house received it and it was handled); the other possible problems with babysitters is traffic and speeding parents to and from the sitter. Selling something illegal would also be a big problem--danger for all living around you. If things weren't obvious or a safety issue, there might not be a problem. No one ever comes to my house for my items; I mail them and use the phone--there is nothing you can see, hear, taste or smell from my house except other's dog crap in my front yard!!!!!!!!!!!!!! Now, if we were to try to shut down all in-home businesses (that aren't causing a problem) we wouldn't have an assn. anyway. EdR

WardellD
(Washington)

Posts:64

04/09/2006 7:27 AM
It would always be nice to see what the CC&R’s say by posting them so that we can read them, next let’s be reasonable about what we are trying to enforce when you are saying that this person is running a business from their home. The ACC should ask these questions? 1. Does the person advertise that they are running a business from the home? Are there signs on the property? Do they advertise in the paper? 2. Do they have a license to run a business from the home this can be checked very easy? 3. Is it causing unknown customers to come in and out of the neighborhood? This is just an example as for how you should approach this problem be cause the key is if it is a business that does not have customer coming and going and they are noot advertising then it should be ok, unless that person is running an illegal business drugs, guns you can understand what I am trying to say. I hope this help, have a great day. wardell

HaroldS
(Arizona)

Posts:904

04/09/2006 10:58 AM
Have you reported these felons Brian? Since you apparently have knowledge of their crimes, you could become an accessory. Does anyone see how ludicrous HOA enforcement has become? Recently we heard from a board that pays members to spy on and turn in their neighbors who don't clean up their dog's mess. This reward is not specified in the CC&Rs, but is a board concocted "rule." Another wants to know if she can punish members by daily fines for having overweight dogs or too many specified pets - if her by-laws permitted daily fines she wouldn't be asking. And now we have someone interpreting as an in-home business; selling on eBay or preparing things to sell at a flea market not even under association control. We are always told, "You should have read the CC&Rs." But what is our defense against these board interpretations and mandated rules inflicted on us after we have signed those documents? These over zealous personal agendas go way beyond the often stated mantra of HOAs: "To Maintain Property Values." Instead, this is just plain SICK. And they wonder why no one wants to serve on the board? That's because most people have an inherent sense of decency, and want no part of spying on and policing their neighbors. Unfortunately, there are a few who enjoy doing this and delight in the resultant power. Harold

CharlieT
(Texas)

Posts:12

04/09/2006 11:34 AM
The only concern the association should have if the home business creates additional traffic in the neigborhood. Otherwise,the assocaition should have no objection to a home business unless an unlawful buiness is operated. Charlie Tiano

KevinK2

Posts:0

04/09/2006 2:12 PM
Our HOA has a similar rule in our C&Rs. We interpret it as "if it appears to be a business from outside the home, then it is not permitted". We ask the owners to correct any problems, such as posting signs, improper parking, excessive traffic, commercial vehicles, etc. Our county (Orange County, FL) also has a zoning law that prohibits businesses in residential areas.

BrianB
(California)

Posts:1748

04/09/2006 6:43 PM
All great answers, thank for your discussions so far. One "wrench" to throw into the works: Since our CC&R's state absolutely "no businesses" (and does not say "no business that causes problems, too much noise, odors, extra traffic, etc.), what can we do as the board? If we ignore these non-problematic businesses, how can we then rightly enforce other covenants? Won't people be able to point to this one and say "Why such selective enforcement? Why do you enforce Rule 7, about dogs, and not rule 14, about home businesses?" If a board refuses to enforce one rule, can they legitimately enforce any?

RogerB
(Colorado)

Posts:3724

04/09/2006 8:48 PM
The board needs to use good business judgement when enforcing the restrictions. How do you know about a business which is not creating a problem? One question to ask when chosing whether or not to enforce is "does this have a decent chance to win in court?" Your board should not spend tens of thousands of dollars to take an owner to court if they can't prevail. Covenants written several years ago can be out of date in today's world. This one would need to create a particular problem for which you have irrefutable proof. It would also need to be thoroughly documented with proper notices.

Roger Borcherding Official HOATalk.com Sponsor DARCO Property Management (Colorado) (303) 925-0150 *See legal notice below (end of page) or go to www.hoatalk.com/legal

BrianB
(California)

Posts:1748

04/09/2006 9:08 PM
luckily for us, we have a nice busy body with little else to do but run around the association looking for potential violations of the rules to report/file complaints about. And people are thinking, as they chat with her in their driveways about their life, that she is just making conversation. So, when they admit they just finished an article for a deadline, or had a bad day on the phone lines, or the kid they were babysitting threw up all over the couch, etc., they think she is just interested. Little do they know she's taking every word down for a formal complaint to the board.

BeckyW
(Florida)

Posts:26

04/09/2006 9:22 PM
I agree with Roger's last post, Brian. "No business" is our Covenants too; however, there needs to be a solid reason (with proof) for a Board to go after a homeowner. We do happen to be dealing with one such instance now - complaints from the neighbors and parking issues with the homeowner brought the business to light... but we didn't actively seek it out and won't. Luckily, our county has restrictions on home businesses so we've chosen to ask the county to take the first step. Is this selective enforcement when assuredly there are other businesses in the community? - technically yes. But I don't know of any others - for sure. Is it selective enforcement by dealing with lawns or dogs and not businesses - I'm not so sure. If our Board (and management company) policed for every single restriction in the Covenants, we'd all be working 24 x 7 and would probably be hanged and quartered. The homeowners are going to scream about selective enforcement when you ignore one homeowner's dog poop and fine another homeowner --- or when they're trying to deflect their issue. If they have a legitimate beef, then you fix it. b.

RogerB
(Colorado)

Posts:3724

04/10/2006 6:51 AM
Brian, your busy body's complaints are hearsay, not evidence. As a managing agent I would not even send a warning letter without verification of a violation. I do check out every complaint by an owner and take photos to document violations. After there is documented evidence the owner need is notified of the violation, provided a picture of the violation (when applicable), given a timeframe for correction, the right to have a Hearing, and the potential of a fine. If the violation is not corrected within the reasonable timeframe then a second letter is sent which advises they have a right to a Hearing or if they waive the Hearing there is a fine of $XX for non-compliance as provided in their copy of Rules and Regulations on Enforcement of Covenants and Rules. The HOA Hearing allows the alledged violator the opportunity to challenge the violation and to become more thoroughly aware of the evidence. If these procedure are followed and the Board has a solid case then an owner would be foolish to persue the matter.

Roger Borcherding Official HOATalk.com Sponsor DARCO Property Management (Colorado) (303) 925-0150 *See legal notice below (end of page) or go to www.hoatalk.com/legal

DeAnnW
(Virginia)

Posts:18

04/10/2006 10:16 AM
Good question Brian This is one topic that has always given our boards trouble. Our deed restrictions say-- Said lots shall be used exclusively for residential purposes except those lots that may be designated, subject to rezoning (if any) and zoned as business or commercial areas on the plats by Caroline Pines Inc. When I first joined my board there was an ongoing lawsuit concering this subject. A lady that operates, in her words and even has a sign in her front yard advertising, a daycare was asked to shut it down because of the road traffic that was being created and the water use(we own and maintain our own water system). Like I said I came in on the middle of this so I never got all of the details, but in the end the association lost, something about she did not meet what is defined as a business. We did had a new property owner that moved in and went to the county and got a list of every registered business owner and asked the board what they planned to do with it. We told them that the list would be evaluated and dealt with on a one by one case. We did not want to punish these people who had never caused any problems, but also did not want to not enforce our own rules. We have still not come up with a good solution. Our deed restrictions actually state that we cannot change this particluar restriction.

LouraS

Posts:9

04/10/2006 12:21 PM
Okay, just like any good attorney, I'm here to throw a wrench in things. Hopefully, not too big of a wrench. All of the previous posts have been very logical and make sense, but the law isn't always logical. Any community, when faced with questions about whether to enforce a recorded restrictions should consider the following: 1. Is the restriction clear on its face? If not, you can certainly adopt resolutions which clarify what is meant. This one sounds pretty clear. 2. Is the Association REQUIRED to enforce? What do the Bylaws and Declaration say? Is it disretionary? If discretionary then I think the Board will want to use its best judgment in deciding what to do about alleged violations. If it is not discretionary then the board must weigh the risk of enforcing with the risk of a lawsuit by an owner (your busy body) who wants it enforced and by failing to do so, the board is in violtion of the declaration. 3. If you don't have discretion then I'd suggest a written legal opinion that hopefully tells you not to enforce because of the situation, the proof issues, the facts, etc. This will then protect the board if the busy body sues you. 4. This is a prime example of when an amendment would probably be successful. If owners don't want it enforced then you should amend the declaration to remove the restriction or rewrite it to follow the okay to have business in home unless you can hear it, smell it, see it approach.

Loura Sanchez, Esq. Official HOATalk.com Sponsor HindmanSanchez Attorney Licensed in the State of Colorado www.hindmansanchez.com * See "HindmanSanchez Legal Notice" below, at bottom of page or go to www.hoatalk.com/legal

LisaS
(Illinois)

Posts:339

04/11/2006 6:25 PM
I agree with Loura. Ammendment would seem prudent. Our CCR's state that the business cannot have signs or cause additional traffic. Additionally, it can't be in violation of our local ordinance. We don't usually have any problems...until a complaint recently about a 'daycare'. Loud, unsupervised, etc. Too many kids. We let the local government handle it, as by ordinance 4 or less kids are allowed in any home daycare here. if there had not been a complaint, we ouwld have let it go, because how do we 'prove' 4 or less kids without surveilling the house!!

BrianB
(California)

Posts:1748

04/11/2006 6:39 PM
you can prove kids in daycare the same way you would prove pets in a home, sattelite dishes in yards, clothesline poles and illegal porches or swingsets... in our HOA, it's called "visible from neighboring property". If it can be seen from the street or a neighbor's property, you can bet someone will see it and file a complaint.

PatriciaS
(Florida)

Posts:12

04/16/2006 7:29 PM
Laura S. Your reply was very interesting. We have an issue as well with our Board or should I say Board Manager. We complained on 2 points and because the manager, himself, does have yard sales; we were flatly told that yard sales are not business. We told him it was in that money was exchanged for goods. Our Second issue is that there is a no parking on the right of way period! The neighbor who has these yard sales, has several customers who have no regard for our maintained righ of ways. They dig up our grass with their truck wheels. When I complained about both being against the deeds, I was told that yard sales are not business and that the security puts on blinders for parking on the righ of way during such an event. Our board is useless, they do what the manager wants mainly because they do not know the articles or bylaws. I had told them that the forefathers who wrote them were brillient in that they could foresee the problems. They break 3 codes. 1 is parking on the righ of way, 2 is being a nuscent with total disregrd for the neighbors, and 3 they are conducting buiness. I told him at the very least, they should rope of abutting areas and security should ticket people parked on the right of way they could park in the street on the pavement. We spent lot of money and my husband spent endless hours putting down top soil, seed and fertilizer and it was all gone in one day. Would you agree yard sales are business?

Patricia S

BrianB
(California)

Posts:1748

04/16/2006 9:25 PM
having an occasional yard sale or garage sale wouldn't likely be considered "running a business" from the home. The key word is "occasional"... I have known people who have garage sales 40 weekends a year, and i would say that they are running it as a business. One key issue, at least from a legal/tax standpoint: Are the items being sold in the yard sale "extra" items from the home, or are they items purchased with the intent to resell. It can be a hard distinction to make, but someone who peruses flea markets, buys an item, cleans it up and resells it is running a business. Or buys a dozen boxes of XXXX, and then resells it still in the package. Someone who sells their unused exercise bike is having a garage sale.

PatriciaS
(Florida)

Posts:12

04/17/2006 2:58 AM
I truly understand what you mean by occasional but my issue is with the article itself . My belief is that there is a difference between running "a business" and no "conducting business" on your lot. My second issue was dealing with the annoying other neighbors. That too is in the Articles.

Patricia S

PatriciaS
(Florida)

Posts:12

04/17/2006 3:03 AM
Personally, I would object to several children yelling, crying and running around. Especoally if fences are prohiniyed as well. I would think it may be a legal issue for safely and liability.

Patricia S

SwanB
(Washington)

Posts:194

04/30/2006 10:12 PM
As I have seen stated in previous posts, our HOA also has a 'no business or commercial activity' phrase in our CC&R's. We have had groups use this in their rallying cries against property rentals but what about members who are also contractors/builders who buy lots, build on those lots, and sell those lots? Isn't that a commercial enterprise going on within our HOA? Not to mention all the business activities going on behind closed doors of our telecommuters, computer consultants, realtors, and engineers who live here and commute by phone. When I questioned the phrase's existence and history, I was told it existed to keep people from coming into our gated community with our private roads and opening auto repair shops or beauty salons or day care centers that would require nonmembers access. This made sense in a certain less technically oriented timeframe. It doesn't make sense anymore. How would a Board stop rentals or a home business because they are violating the 'no business or commercial acitivity' clause but legally restrict a member from building on his or her lot and selling that lot and then buying another and doing the same thing just because they have a contractor's license?

PatriciaS
(Florida)

Posts:12

05/01/2006 4:42 AM
That is an interesting point of view, one which I had not tought of, but if a contractor is building on spec, then yes, that is a business, but does he live there? I think that if he had heavy equipment than you would have every right to stop him seeing he not only is causing a grave inconvenience, but his heavy equipment is teariing up your roads and you will be assessed to pay for the repaving and the builder get by scot free yet and has made a handsome profit. I think if the members of your community agree on that then go ahead, but if they didn't, them I'd say to push for an admendment for no building on spec.

Patricia S

JulieS
(Georgia)

Posts:412

05/01/2006 11:26 AM
We have similar wording in our docs and understand that the rules were written in a time when people didn't telecommute, there wasn't internet, etc. Covenants should be updated as times change so that they suit the needs of today's life styles. Our board would only act on this if there was a problem with traffic or commercial vehicles being parked in the neighborhood. We had an incident with a person who owned his own landscaping company. There wasn't any traffic coming into the neighborhood due to his business but sometimes he parked his landscape truck in the driveway. We sent him a letter for a commercial vehicle violation. If someone was running a day care facility out of their home with excessive traffic, we would probably talk to them. If this didn't resolve the problem, then we would go to the county as this is a highly regulated industry. I'm sure there would be zoning and licensing restrictions for this. My neighbor worked from home selling printing supplies. No one knew she did this because it didn't cause any problems to the neighborhood. What is the issue from people working from home? We had someone making halloween wood decorations to sell at an art show...no one came to the house to buy them so it wasn't a problem. Neighbors need to be able to make a living and the HOA shouldn't become involved with this issue unless it is causing harm to the neighborhood.

SwanB
(Washington)

Posts:194

05/01/2006 9:32 PM
We have numerous contractors who are members, live full-time in our gated community and work from their homes. Their shops are their trucks; as anyone who has run a small contracting business knows and a desk, phone and computer in their home. On occasion and when the opportunity presents itself, those members will buy a piece of property in our assoc., build on it and sell it. Just like they would pick up a piece of property anywhere else. We don't adjudicate but we did have a previous Board that attack members who were renting because of the whole 'no business or commercial activity clause'. At our AGM in June we plan on facilitating an open forum with our members to discuss this issue in our bylaws.

PatriciaS
(Florida)

Posts:12

05/01/2006 10:21 PM
If you know that coming into your community than I think you are ok. I personally would not want to live in a community with a lot of construction equipment next door to me, but thaat's just one man's opinion. If you and your community have no problem with that then go for it. I believe a deeded community should live by its bylaws and articles. If you brake one then none of them are good. You cannot be picking and choosing which ones work and which ones don't. I believe if you are moving in you read the deeds, by laws and articles. If you like them. you move in. If you don't you do not move in. I'm not saying its easy but it is your choice. and if others trespess on your choice that is not right providing each one signed the same bylaws. Each pays for their dues each is a member with rights to be protected.

Patricia S

BradB1
(Illinois)

Posts:15

05/10/2006 11:03 AM
We are having a grave situation with this issue in our HOA. We have a "no business" clause in our R&Rs, but it does exempt telecommuting, keeping businesspapers/records/library, contacting customers by phone/email, bookeping& accounting, etc. It even exempts daycares under four non-related children under one roof (following with similar language in the Village ordinances.) HOWEVER, we have two landscapers who have decided that it is their right to park their bobcats/bulldozers/trailers, etc. and loaded pick-ups in their driveways. Mind you, we have a "no trucks" clause in addition to a "no advertising--no lettered vehicles" clause for parking in driveways--other than temporary. It seems the landscapers both chose small model houses with only 2 car garages (when three and four-car tandem garages were available. They park across the sidewalk into their apron, causing pedestrians/children to have to walk into the street to pass their house--which is right next to the children's park! We are in the process of the "builder-run association turn-over" excitement, so none of the rules have been enforced thusfar. We have one "activist" who has submitted 154 complaints in a week, documenting every four hours the status of the trucks parked, substantiated with witness signatures, license plate numbers and photos. He was a member of a HOA in the past where a fellow owner sued the HOA and each unit was assessed over $2,000 in that judgement--except for him and a few others, who formed a "class action" against the HOA in order to remain exempt. So this guy "knows the ropes," so to speak, and is in a "get them before they get you" mentality. Unfortunately, he is putting this brand new board in the position of having to be the "bad guys" or face neglect of their fiduciary duties as members of the board. The one extra caveat to our situation is that we have a property management company that is supposed to be handling the complaints/notices for the board (and has been employed since the inception of the community.) The "go-fer" for that company does not follow through with her job and was caught by another community not making her required rounds (by using a 24 hour surveliance camera at the entrance to the community and going through 2 weeks of tape with no sign of her.) She is "buddy-buddy" with said landscapers and has been giving them the "inside scoop" to the point where we had the owner of one of the landscaping companies show up on our doorstep shouting vulgarities and demanding the resignation of the board--and stating that he has a petition circulating to remove the board. Again, this is a board that has only taken over less than 70 days ago and has dealt with issues regarding contracts, attorney hiring, finding a new property manager, establishing a new bank account, formulating a rules & regulations committee as well as handling the influx of spring "architechtural applications" for decks, patios, landscaping, etc. It has been a nightmare. Our proposed solution was to send out a newsletter debunking the "rumorville grapevine" myths and explaining the process for filing complaints, filing applications for alterations and explaining some of the most commonly mistaken rules--while giving everyone a "first warning" without specifically fining or penalizing anyone. We set a date for an "open forum" for members to air their concerns, ask questions and basically clear the air. (Yes, we are looking into hiring security for the meeting after seeing examples of the tempers of some of the people in our neighborhood!)

JulieS
(Georgia)

Posts:412

05/10/2006 11:38 AM
I would send out the letter/newsletter to dispell rumors, generalized rules, etc. If the MC will not send the violation letters, then have the board do it and start looking at a new MC. Follow procedures in your docs....warning letter quoting violation, 2nd letter with a stated time to correct the problem and then the fine letter and start fining per your docs if allowed. This is how we handle it. If the vehicles/trailers are parking over the sidewalk and into the street, have the police issue a ticket. Also, send the specific violation letters 'signature required'. I ended up with dead grass from an upset homeonwer who threatened retaliation after being fined. He eventually moved out and I reseeded my lawn.

PatriciaS
(Florida)

Posts:12

05/10/2006 11:51 AM
I think if I was on the board to be, I would try to have a repore with the local Sheriff. If these landscapers are parking across the sidewalk, clearly that is against the law. The law should be taking care of that one; at the very least for the time being. I think if I lived there from the sounds of things, I'd be looking for a good realtor! Good Luck and don't let them rule!

Patricia S

EdR
(Texas)

Posts:170

05/10/2006 12:28 PM
As if things aren't confusing enough in this thread, I thought you'd all appreciate this dilemma: a home in a nearby assn. has a daycare/babysitting service that she supposedly had a license for it but did not have a sign out because it is disallowed by the deed restrictions (so is the daycare, actually); well a few months ago, a sex offender moved in across the street. The woman running the daycare has been in a battle with the authorities because she doesn't like having the guy living there because of her daycare; the assn. is pi$$ed because she is running a business out of her home; the police are saying that if she'd had a sign in her yard, they could have warned her or may not have allowed the guy to live there; the offender is saying he has a right to live SOMEWHERE because he is registered and didn't know she had a daycare. He is actually more legal in this situation than the daycare if you want to get technical. There was a huge article in the paper about her daycare and how she's been in business for 16 years and on and on. The fight is ongoing and I don't know how it will turn out, but now she has lost several customer's children because the families don't want their child that close to the sex offender's house. Is this a mess or what? It's a good argument for not having this type of business in your home because what if there is an offender that you don't hear about? EdR

BradB1
(Illinois)

Posts:15

05/10/2006 2:37 PM
The problem we are running into is that the subdivision is not 100% complete yet, so the builder has not turned the streets/parks over to the Village yet. We can't get them to do anything around here! Oh, to make things MORE interesting--we just found out that our builder is going bankrupt! So much for the bond they have with the city for the streets & parks! Does anyone know what liability we might have as a HOA if the builder goes belly-up prior to completion? Chatting with the mayor, he assured us that the letters of credit they certify with them are good...but you never know. This is Smalltown, USA and the developer is a home-town guy.

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Forums > Homeowner Association > HOA Discussions > Business in homes: how do YOU adjudicate?