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When it comes to renting out your property to tenants, there are certain issues you need to keep an eye out for. One such possible issue is the tenant running a business out of the home. While there is nothing illegal about running a business out of a home or even a rental, there are a few different elements associated with this you need to be made aware of. Ultimately, this can affect you in ways you might not of ever imagined. Due to this, if you discover a tenant is running a business out of the home, you need to know what to do.

For starters, it is very important to include a clause inside of the lease regarding running a business out of the home. If your lease agreement doesn’t have any mention of a business, there might not be much you can do. The tenant can clearly point out there is no mention of them not being able to run a business inside of the property, so it might prove extremely difficult for you to remove them from the property. Due to this, you need to at least include inside of the lease agreement that any business run from inside of the property needs initial approval by you. This way, you can at least inspect the situation ahead of time in order to see if it is alright or not.

If you find out your tenant is running a business out of the home, you need to talk with them and find out what exactly is involved with the business. They might just work completely online and have no real inventory or other products on hand. They might simply shoot short videos, take photographs or write content for other entities online. This really is not going to affect you or your property at all, so there is nothing to worry about. However, there are other businesses you need to know about. If the tenant is having retailers and distributors stop by the property, while regularly shipping out goods and mass producing material inside of the property, you need to know about this, as this sort of a business can significantly alter and affect you both as a landlord and financially as well.

For starters, if your tenants are manufacturing material inside of the basement, it might void your property insurance. Should the home catch on fire based on the material they are making, your insurance might not cover it at all, which can leave you paying for the property damage yourself. If this is the case, you need to discuss the situation with your tenant. First, chances are you do have an area inside of the lease that state you are able to increase the rent with property notice. If you don’t have a problem with them running the particular business, as you don’t see it as a possible threat to the integrity of the building, nor something that is going to disrupt the neighbors, than you might simply want to point out the situation and the fact that you need to change your insurance coverage in order to cover this. Tenants are more likely to increase their monthly rental payments to cover the change in insurance. This also gives you the opportunity to remove them, should they not agree to pay more for rent, as you have a justifiable reason to do so.

Lastly, while you don’t have to worry about losing your property, should someone ever sue the tenant’s company, it does open your property up to more property traffic, billing collectors and other negatives.