If you live in a complex and run your business from home, it’s also important that you don’t contravene the Sectional Title Act. Marina Constas, a specialist sectional title attorney and a Director at BBM Attorneys, warns that before you start setting up your operation, you need to establish whether you’re legally permitted to run a business from your sectional title townhouse or flat. It’s pointless embarking on a new venture or registering a business only to find you have nowhere from which to operate.
What the Act says
Constas says in terms of the Sectional Title Act, an owner is not allowed to use a flat or townhouse for anything other than that shown on the sectional title plan.
“Most sectional title plans indicate that the purpose of the complex is residential, so you may not use the section for any purpose other than residing there or allowing a tenant to live there.”
But she says the legislation can be flexible enough in cases where the body corporate approves of your venture when it won’t inconvenience other members of the residential complex.
“An owner may utilise the premises for a purpose other than residential if all owners agree. The upshot is that if Mr Smith, the owner of sectional 18, decides to run his estate agency from home in a sectional title complex, he requires the consent of every owner to do so.”
What kind of business can you run?
Constas says the flexibility of the Sectional Title Act always boils down to “good old common sense”. The first thing needed is to recognise the difference between working from home and running a business from home. “Consider the case of running a brothel, which is, of course, illegal, but is also rather labour intensive, with people in and out all the time! This is completely different from an accountant who simply prepares books for clients. In other words, they don’t have to come into the complex at all. He is running a business and is being paid for his services, but there is certainly a huge distinction between the first and the second scenario.”
What if you get opposition from the body corporate?
But what do you do when you can’t get the body corporate to agree? “If the type of business you want to run infringes on the rights of the other owners, such as noise nuisance, parking issues and security concerns, then be really wary of getting started. You may very well face arbitration proceedings and large legal bills,” Constas warns.
If the body corporate made a case against you, you’ll receive two notices of dispute to stop you from carrying on the business. “If you continue and ignore both notices, the body corporate would have to display the name of three arbitrators (easily obtainable from the Deeds office), and request that you choose one within three days.” But be warned that any award made by the arbitrator can be made a High Court order if ignored by the loser. The loser will also have to pay a portion of the costs of the winner, as well on the arbitrator’s fees.