Most Declarations contain a provision prohibiting commercial or business activity from being conducted or operated from a unit or home within an association.  Deed restrictions prohibiting business or commercial activity are consistently upheld in Ohio courts as valid and enforceable.  But what is “business” or “commercial” activity?  Ultimately, it is up to a court to decide on a case by case basis.  Many factors may be considered by a court in making this determination.

Some courts evaluate whether the activity changes the character or purpose of the community and whether it affects other residents, with things such as increased traffic, noise, and use of the association’s utilities.  An example of this would be babysitting as opposed to running a daycare.  The court may find that having one or two children babysat at various times is not a commercial activity.  Whereas operating a daycare which has set hours with multiple children coming in each day is a commercial activity.  The court may view the increased traffic during pickups and drops from the daycare as intruding upon the rights of the other residents in an association, unlike the periodic activity that may come from babysitting.

Courts also may interpret “commercial activity” to mean the buying and selling of goods.  Running a business is different than working from home.  Generally speaking, if you are working from home, the business you are part of is not being run from your home.  For example, an owner working in information technology for a company is not running a business from home if they work for Nationwide Insurance.  On the other hand, a court may find that an owner who runs an auto mechanic business or beauty salon out of his or her garage is taking part in commercial activity as they are taking money for services or goods they are providing within the association.

In most cases it is not too difficult to determine if someone is working from home or operating a business from home. If an association believes that a resident is undertaking business or commercial activity from their home, it is important to review whether this action is negatively impacting the other residents in the association.  A review of your association’s Declaration and local ordinances will determine what, if any, business activities can be run out of a home in a deed restricted community.