What to do if a tenant starts a business in your property?

Property Management Blog

Many people are forced to work from home as they do not have the resources to start business in a commercial place. But you as a landlord do not like the idea of any of your tenant starting his business in your property. This is because there are consequences that you must bear as the owner of the property. Here is what to do if you learn about a tenant who has started a business inside your property.

Learn about the nature of his business

More important than the news about a tenant running a business in your property is the nature of that business. You cannot directly inquire from the tenant if you are not on good terms with him. You have to rely upon your sources to learn about the activities of the tenant. Sometimes landlords learn about such a business when other tenants complain to them while in many cases, landlords learn about a business when they are carrying out a routine inspection of their property.

It is your responsibility to be concerned about the activities of your tenants. A tenant running business can lead to several consequences, some of them being mentioned below.

* This business could bring outsiders in your property
* Other tenants may complain about violation of their privacy
* Your property may suffer from damages
* You can be sued for compensation in case mishap takes place
* Authorities may issue notice in your name as the owner of the property

You cannot treat all businesses as same

Some landlords make the mistake of if all kinds of businesses are alike. This is not true and you need to investigate the nature of business of your tenant. Of course, there are businesses that are harmless and best suited to be run from homes. However, this cannot be said about all businesses as they can be a nuisance for other tenants as well as your property. Can you really compare a tenant selling products online with another who uses your property to sell used cars? However, you are the judge as it is your property and you will make the rules in this regard.

Why nature of business matters so much?

If you do not want to spend time analyzing business activities of a tenant, it is better to ban all kinds of business activities in your property. However, it is not a very good decision and not a practical one. If a tenant designing websites is not causing any problem to other tenants, why should you raise hue and cry? On the other hand, a tenant selling used cars can be a nuisance for other tenants as well as your property. You need to act in case the business is such that it hampers with the activities of other tenants and it can potentially damage your property. Your action is also needed if the tenant puts up signboards and directs customers to your property.

Protect your business

There can be many ways to make sure your tenants do not carry out businesses inside your property. You can make it clear at the time of signing lease agreement with your tenants that they cannot carry any type of commercial activity while living in your property. However, there are some businesses that are harmless and do not cause any nuisance for other tenants. You need to draw a red line and tell your tenants what is acceptable and what is unacceptable to you as a landlord. You can include a clause in your lease agreement form that your decision in this regard shall be final and binding upon your tenants.

If you’d like to talk more about property management, or you need help with Everest Property Management, please contact us at Everest Realty. 

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