Home Business Being a Bad Neighbor? Your Legal Options.

Are your neighbor’s business activities making it hard for you to enjoy being at home? Perhaps the noise has become excessive. Or maybe your neighbor’s home business has made street parking impossible. You may suspect that these issues violate your rights as a property owner or resident. But you might not be quite sure what those are or what the law says about this type of activity in your residential neighborhood.

The rules regarding home businesses can vary by location. They generally stem from regulations at the state and local level. In this article, we’ll explore some of the legal principles behind these rules, as well as the rights and responsibilities involved.

If you’re dealing with a neighbor’s problematic home business, consider speaking with a local real estate attorney. They can help you understand the range of remedies available to you in your jurisdiction so that you can determine the best way to proceed.

Legal Landscape

Whether someone can operate a business from their home is governed by a combination of state law, county or city code, and sometimes private agreements like HOA rules.

State laws don’t usually regulate home businesses directly. But they tend to control the amount of power local governments have to do so. Local zoning ordinances generally contain the most direct and detailed rules about operating a home business.

Zoning Laws

City councils and county boards typically set zoning laws to divide municipalities into categories of permissible land use. For example, residential, commercial, and industrial zones are some of the most common classifications. Locales often create zones:

• Within these categories, like single-family residential zones
• Combining these categories, like mostly commercial zones with some housing

The main idea behind zoning is to keep incompatible uses separate. After all, you probably wouldn’t want an automobile factory in your backyard.

Restrictions

While running a full-scale commercial operation from home often directly conflicts with residential zoning ordinances, many do allow certain types of home businesses in residential areas. Conditions usually apply and typically address things like:

• Signage in the front yard
• Non-resident employees
• Customer traffic
• Noise, traffic, and other disturbances noticeable from outside the home
• External storage
• Limits on home space used for the business

These permitted exceptions are usually designed for small businesses that don't change the residential feel of the property or neighborhood.

For example, Los Angeles zoning law requires a home-based business to be secondary to the home’s main use as a dwelling. It must still look like a residence. No signs or outside employees are allowed, and the business can’t create noise, traffic, or smells that bother neighbors. Customers may visit only by appointment, and only during certain hours. If a business complies with these rules, it’s generally considered a legal home occupation under the city's municipal code.

Local code enforcement departments typically enforce these rules and address potential zoning code violations on public and private property.

Homeowners Associations

If you live somewhere with a homeowners association (HOA), there's likely another layer of rules to consider. HOAs can generally restrict the use of properties within a specific development. But they can’t override or conflict with zoning or other laws.

HOA rules may cover the same things as public zoning laws, like vehicle restrictions, for example. But they tend to be more specific and stricter.

Many HOAs have specific limitations on commercial use or home businesses. Some flat-out ban any commercial activity. Others might allow quiet, office-based work but prohibit anything with customer traffic or employees.

Business Licenses/Permits

All businesses, including home-based ones, generally need to register with the local municipality and obtain a business license. Depending on the type of business, they might also need specialized permits. For example, a home-based bakery might need a specific food service permit.

If your neighbor’s home business is interfering with your property use, it may be operating without the necessary permits. This is illegal. It could also indicate safety issues or a lack of oversight that affects other neighbors.

Frequently Asked Questions (FAQs)

Even if your neighbor’s home business complies with zoning laws and HOA rules, it can still pose issues. In this section, we discuss some questions that frequently arise in this context.

Can My Neighbor Host Garage Sales?

Oftentimes, yes.

Zoning laws generally allow occasional garage sales of personal household items. They’re usually treated as temporary, non-commercial activities rather than home businesses and are subject to specific restrictions. These tend to include:

• Frequency/duration limits
• Signage rules
• Hours of operation
• Types of items sold

These rules often prohibit the sale of new, wholesale, or commercial inventory in residential areas. Garage sales that become frequent or ongoing events can violate zoning laws. If the arrangement looks more like a retail business, legal authorities may treat it as an unlicensed business.

What About Short-Term Rentals?

Whether short-term rentals (STRs) like those listed on Airbnb or VRBO are allowed in your neighborhood depends on local zoning laws. Many places treat STRs as a commercial use, even if they happen in a residential home.

Because of this, residential zoning laws may prohibit or limit STRs, especially in areas zoned strictly for residential use. Some cities allow STRs only in mixed-use/commercial zones. Others may require that the host live on the property.

STRs typically require permits that are distinct from standard home occupation permits.

How Do I Report a Neighbor’s Illegal Home Business?

If your neighbor’s home-based business violates applicable laws or rules, you can generally report it to the local authorities. That usually means:

• Noise/traffic violations: Contact local police using the non-emergency line.
• Zoning violations: Contact the city/county's planning or code enforcement department.
• HOA rule violations: Contact the HOA board or management company for help with HOA disputes.
• Health/safety violations: Contact the local health code enforcement department.

These entities can usually take enforcement action for violations. This can include fines, penalties, and legal action. Most agencies allow anonymous complaints to protect your identity. You should also be able to file complaints online, by phone, or in person.

Can I Sue My Neighbor for Operating a Home Business?

If your neighbor’s home business interferes with your rights, yes. There are several legal claims you may bring against them, even if their business seems to comply with local rules.

The legal actions you pursue will likely depend on the specifics, as well as state and local law. Common legal claims include:

• Nuisance: Disturbances like loud noise, bright lights, or traffic that makes it hard to enjoy your own home
• Trespass: People, vehicles, or things (like equipment, water, and smoke) that enter your property without permission (even if no damage is done)
• Property damage/negligence: Damage to your property, like flooding or foundation cracks, caused by the business

You can also bring a property damage action for things like property value and privacy concerns potentially caused by the business.

How Should You Address the Problem?

In some cases, you may want to try speaking with your business owner neighbor to reach a resolution. But this may not be realistic for various reasons.

You’ll likely have several other options to consider. To best understand them, it’s highly advisable to discuss them with an attorney who’s experienced with the real estate and land use laws in your area.

In the meantime, be sure to keep detailed records of the problem. Include dates, times, and descriptions of the occurrences. Take photos or videos of damage, as appropriate. This can be invaluable as you move forward.

Getting Legal Advice

Before taking action, you’ll want to consult a real estate lawyer licensed in your state. You can typically share the details and any evidence you have with them confidentially. They can explain the remedies and protections available to you under state and local law. That way, you can make informed decisions about the best way to proceed.

FindLaw’s directory of real estate attorneys can help get you started. Just click on your state, then narrow your search results by city, to view contact and ratings information for local experts. You’ll also be able to see which ones offer services like free consultations.

Legal guidance from a trusted advocate can make an appreciable difference. Consider reaching out to one sooner rather than later.