Home-Based Businesses Challenges for Today’s Co-ops, Condos and HOAs

Dana Greco, a therapist specializing in marriage counseling and divorce mediation lived in a comfortable two bedroom co-op on New York’s Upper West Side near Columbia University.  Divorced herself and with grown children, her apartment was empty most of the day.  She saw no reason not to see patients in her living room rather than rent shared therapist space at ever-increasing monthly charges.  Living on the ground floor next to the entrance doors, she would escort her patients into her apartment as soon as they buzzed the building front door.  One day she received a letter from the managing agent instructing her that she was to cease and desist running her practice from her home.  

According to U.S. Small Business Administration statistics, over half of all small businesses begun in the last decade have been home-based—that’s more than 38 million in real numbers—with a new home-based business being launched every 12 seconds.  Home-based businesses (HBB) earn more than $427 billion per year.

So what businesses can be run from a co-op or condo unit?   Personal consultancies—often computer based—such as writing or research are good examples, along with therapy and counseling services.  Some buildings or associations do permit residents to conduct sessions in their home, which brings us back to Ms. Greco.  After she received the notice from the managing agent demanding, on the co-op’s behalf, that she cease and desist operating her therapy practice from her apartment she spoke to the manager.  He told her that there were too many people loitering in the lobby waiting for appointments.  

It turns out the loiterers weren’t hers.  Across the hall was a music teacher specializing in children.  She booked back to back appointments from 3:00 pm on.  Her students, mostly elementary school age, were accompanied to their lessons by their nannies and often their younger siblings.  The nannies and the siblings waited in the lobby while she taught.  The music teacher was ordered to stop giving lessons in her apartment.  Greco was permitted to continue seeing her patients. 

Restrictions on home-based businesses vary from municipality to municipality and from state to state—so before opening that office and inviting clients to stop in, it’s wise to check the rules.  And beyond government regulations, your community association may have a variety of restrictions on the types of home businesses that are allowed.


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