Buying a residential property for commercial purposes

Buying a residential property for commercial purposes

Whether you’re looking to start a beauty salon at home or turn your garage in an auto repair shop, you need to determine if the law permits it before you can hang your “open” sign. While home-based businesses have been around for years, there’s a significant trend in recent years of larger businesses moving from away from commercial hubs and set up shop in residential areas.

Properties in residential areas are generally not designated for trading purposes. A business that does not attract a large number of clients is usually allowed to set office in a residential area. For example, if you run an online consultancy business from home you likely have no objections from residents and the city council. But, if you hire staff, install equipment, and expect lots of foot traffic, you need to apply to have the building rezoned for commercial purposes.

Rezoning means that a property that has been registered in terms of its uses and rights needs to be reclassified for another use. It is a complex process that includes obtaining a zoning scheme departure, trading license and reports from the health and fire department. Applying does not guarantee approval from the local authorities as there may be residents who are against the commercial addition to their neighbourhood. The city council takes the residents in an area into serious consideration, and as such, you need to advertise your intent to rezone a building in a residential area. This is to give residents a chance to voice their opinion, which will be reviewed by a board.

Aside from doctors, lawyers and dentists, it’s unlikely that the city council will give a business the green light to take their place in a residential area. Prospective business owners will have a better chance of getting their enterprise up and running if they buy property in a residential area where there are already a few established businesses.