Can I Run My Business In My Residential Flat?

You may be in confusion that whether running your Yoga class or tuition class in your residential apartment is breach of byelaw or not. It is true that a residential apartment cannot be used for commercial activities by a member or third-party. Commercialization of residential apartment is often opposed by apartment owners association and its members. This may be a shock for you to know that running your business or Yoga class in your residential apartment is not a commercial activity and it is not a breach of byelaw. Presently, the rules allow 20% commercial use in residential units.

Case Law

• Yoga classes: In the case of Pant Nagar Anandlok CHS Ltd., at Ghatkopar, Mumbai, (Appeal No. 550 of 1985 decided on 24-11-1986 decided by the MSC Appellate Court) it was decided that carrying out activities like conducting yoga classes in a residential flat does not constitute breach of bye-laws of a Co-op Housing Society. The judge said, “The professional activity of teaching certain arts would not in itself become commercial even though some charges are levied in giving some performance.”

• Office of a Chartered Accountant: Phillipose & Co. v. the State of Karnataka, C.C. No. 21496 of 1987: Case under Karnataka Shops and Commercial Establishments Act, 1961 — office of the partnership firm of Chartered Accountants is not a commercial establishment as CAs carry on a profession like lawyers or doctors which is not in any way a trade or business. The judge observed: “A profession is a vocation or occupation requiring special, usually advanced education and skill. The work and skill involved in a profession is predominantly mental or intellectual rather than physical or manual.”

• Business purposes: In the cases of Lakshman Sintre v. Balkrishna Shetye, BLR page 937 and B. R. Oswas v. Laxmibai, BLR page 214 it was decided that when residential premises are used for dwelling as well as for business, office purposes so however that the dominant user still remains residential, it would not be in breach of the bye-laws and regulations of the society as there is no change of user involved.

[Info collected from taxguru.in]

All activities are not Commercial activities

Activities such as yoga class, tuition class or service of Chartered Accountant, Doctor, lawyers are confused as commercial activities and this ends in raising complaints against apartment owners in association meetings. A commercial activity involves any activity relating to the purchase and sale of goods. According to sources, businesses such as professional, service-related as well as that related to teaching certain arts are permitted by apartment owners and association. The work done by professionals involves element of service and not an activity relating to purchase and sale of goods.

Commercial activity within residential premises is generally not permitted due security reasons, besides being a serious traffic nuisance for the residents. You can call a meeting of apartment owners and convince them that your business or service is not a commercial activity and ensure that your clients or customers are not a threat to apartment owners and its residents.

Things to remember

• Get permission from your apartment owners association or housing society and its members before starting your business or service. This clears misunderstanding and gives you support from other apartment owners.

• Ensure that your client or customers are not using common areas such as parking lot or other amenities.

• You may check up the definitions from the local corporation/municipal laws.

• Commercial activity “within” residential premises is generally not permitted due to security reasons, besides being a serious traffic nuisance for residents. Ensure that your business or service is not becoming a nuisance or threat to security.

• Small businesses like small industries promotes the chances of betterment in addition to providing the cheaper cost of products and services. Your business must not result in loss of peace or be a threat to the security of the residential area in which you are staying.

Disclaimer: The article contains data collected from various sources and the use of same is at readers discretion.