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What Landlords Should Know if Their Tenants Work from Home

December 05, 2018

Have you ever rented out property for residential purposes, but then discovered that your tenant used it as a home office without consent? It may not be a problem with self-employed renters who have a computer-based business such as programming, web design, or copywriting, but what if a tenant hires employees to work with them on the property and actively conducts home business that can potentially cause damages and/or disturbance? Is it considered a breach of tenancy, or should it be accepted?

Tips for Landlords and Property Managers

Let’s figure that out by analyzing a few points:

Working from home is becoming more common, and we know why

Thanks to technology, we’ve gained an endless number of benefits. The ability to work from home and still be engaged in corporate activities is one of the most attractive features a company can provide. If you belong to the category of landlords who support home-based work and run your own property management business as a home office as well, you probably won’t have any problem with telecommuting. However, there are a few possible pitfalls we can’t help noticing.

First, if your tenants spend most of their time working in the apartment, they’re likely to use more lighting, heating and cooling, as well as water. Make sure that utilities are not included in the rental price and you’ll reduce additional expenses. Instead, let your tenants be responsible for paying and maintaining their own utility services. You could also recommend that your renters track how much energy they consume per month in order to be clear about what costs them the most money on their electric bills. Secondly, some appliances take more electricity, such as a central air conditioner or water heater. Tenants should keep that in mind so that they’re not unpleasantly surprised by high utility bills at the end of the month.

On the other hand, telecommuting could be beneficial for both parties. First of all, there will always be someone home, so you’ll have no immediate need to install sophisticated home security or an alarm system controlling each corner of the building. If there’s an emergency, a tenant can call for help or assistance. Secondly, any pets will always be looked after and taken outside when necessary. That is an issue that can and has caused problems for landlords and service professionals. But with tenants who undertake work at home, that won’t be an issue.

 

Don’t mess with legal aspects of home business

As mentioned above, you don’t have to require legal permissions if you deal with tenants conducting a computer-based business from home. In the residential agreement, though, it is reasonable to add clauses regarding the type of work a renter may conduct. Additionally, requiring renters insurance from your tenants or asking them to provide their own is a great solution in case of excessive wear and tear on the apartment.

But if your tenant uses the rental as a workplace (for instance, a barbershop or beauty salon) and receives clients on a daily basis, that might be a problem, since the rental no longer serves as a residential property, but a commercial one. In this case, both parties need to become familiar with state laws and relevant government policies on managing and renting commercial properties.

 

Home-based freelancers need a cozy and organized place

Let’s imagine you’ve moved in tenants who operate an online business at home. You’ve included this information in the lease agreement along with other basic details regarding the rental property. The tenants are responsible for utilities and have your permission to work from home. In short, you’ve got it covered!

Now, as a landlord, you’ll probably want to create favorable conditions for your long-term tenants to live in and make it easier for them to work from home. Remember that tenants appreciate landlords who show concern and are eager to help them enhance their productivity. Don’t distract them with too many decorations or unnecessary appliances. Stick to the “less is more” principle and focus on basic comfort to make your rental look simple and organized.    

Do you have tenants who work from home on a regular basis? Have you faced any difficulties with them? Share your thoughts on this topic by leaving a comment below. :)