Is your home open for business?
REZONING FOR BUSINESS TOP 5
- Home-run businesses are becoming increasingly popular for entrepreneurs.
- Due to each municipality having their own zoning criteria, the rezoning process can be challenging.
- Residents are allowed to run small businesses from their private homes in most residential zones.
- Business owners may get consent from the municipality to run their business under certain conditions.
- Your business could be shut down should you fail to follow proper zoning rules and procedures.
As entrepreneurship and the need for additional income streams grows, so does the prevalence of home-based businesses. Having “a real job” is no longer confined to an office in the CBD and many successful businesses are now run from residential properties. Although popular, how does one legally run a business from home?
Here are the top things you need to know about rezoning for business in South Africa.
What is Zoning?
Zoning is a set of rules that determines what can be done with property in every area (municipal zone). Provincial legislature and municipal town planning are in control of Zoning.
Each municipality’s town planning scheme organises areas into residential, business, public space, parking and other specific use areas.
Your home is likely to fall into one of four residential-use zones. The kinds of business, if any, that can be conducted from every property is limited by what zone it is in.
Do you need to be Rezoned for Business?
There is good news for if you are running a small business on your own or only working part-time from home. Most residential zones allow you conduct a small amount of business as a “home enterprise”.
As previously mentioned, each city has its own zone criteria. A basic guideline to remain operating legally is to ensure that minimal space in your home is dedicated to work activities.
In addition there should be enough parking for occasional clients and your work should not require a workshop for vehicles, shops, entertainment, manufacturing or a scrapyard.
You may need to think about rezoning should your business grow to a point where you need to:
- Permanently employee more than two assistants.
- See clients regularly.
- Put up bigger signage.
- Use your property for business purposes more than residential purposes.
If only a few of the residential zone limitations are being overstepped, you may be able to apply to the municipality for consent that will allow you to continue working under certain conditions.
Rezoning for Success
The simplest way to achieve successful rezoning is to link up with other businesses in the area or buy a property that already has established businesses close by. This will make your case for rezoning stronger when it is put forward to stakeholders and other residents for approval.
Do your research before applying, such as how easily accessible your property is for the public and if any additional trading licenses are required.
Don’t Neglect a Trading Licence
Under the Business Act of 1997, No. 71, Schedule 1 (section 2) businesses that include the following are required to apply for a trade licence from the Licensing Department:
- Sale or supply of meals or perishable foodstuffs on or off the premises including hawking on public roads in any structure or vehicle.
- Provision of certain types of health facilities including turkish baths, saunas, massage or infra-red treatment.
- Keeping three or more token or coin operated mechanical, electronic or electrical devices.
- Keeping three or more snooker or billiard tables.
- Conducting a nightclub.
- Conducting a cinema or theatre.
Applying for the above license will require relevant reports proving that you meet regulations from the health and fire departments as well as town planning.
Having your property zoned for mixed-use or business can increase the value of your property substantially. The downside is that the process to rezone can take a few months and should any opposition arise from neighbours your application is likely to be rejected.
Running a business without the necessary approvals and licenses is likely to lead to difficulties including interdicts, fines or forced closure should you continue after notices to stop are received.
Before starting a home-business or buying a property with the intent to run a home business it is best to visit town planning, get professional advice and ensure the zoning rights are in your favour.
Find more business tips on our brand new Business To Business website.