Keeping in-home businesses legal

With benefits like free rent, home comforts and no commute, choosing to live and work in the same place can be quite appealing.

Among the many things to consider when setting up a home-based business are the legal requirements set by local governments. Cities like Boulder, Broomfield and Longmont make it relatively easy to operate a business from one’s home.

According to city documents, the biggest concern surrounding home-based businesses, termed “home occupations,” is that the average neighborhood resident may not be aware of their existence. To this end, Boulder, Broomfield and Longmont have similar policies in place.

The first step to legally operate a home-based business is to file a sales-tax application with the city. Boulder and Longmont require an application for both service businesses and sales-based businesses. Broomfield does not require a license for service-only businesses where sales are not being made.

The fees for a sales-tax license vary among each city. In Boulder it is $25, in Longmont it is $15, and it is free in Broomfield. Boulder and Longmont also require the business owner to submit a home-occupation form. This form lists the policies the homeowner/business owner must comply with. Broomfield has similar policies but does not require businesses to submit a separate form.

“We try to make it as simple as we can,´ said Steve Stientjes, sales-tax administrator for Broomfield.

According to city officials for Boulder and Longmont, business owners generally receive their sales-tax licenses within two to three weeks. In Broomfield, it takes about five to seven working days. Each city runs the license application through its planning department to ensure the business will comply with city codes.

Certain types of businesses are required to get additional licenses. For example, in Longmont, massage therapists must apply for a massage therapy license. Most special licenses do not apply to home-based businesses, but it is best to check with the city.

To operate a home-based business, there are specific rules that homeowners and business owners must follow. The home-occupation rules are common to each city and include the following guidelines.

_ Home occupations must be conducted within the principal structure, or an accessory structure (such as a garage), and only by someone living there.

_ The business use must be secondary to the residential use and must not change the residential character of the building.

_ The area used for the business should not exceed an area equal to more than one-half of the first floor.

_ You cannot change the outside appearance of the home to indicate there is a business there. Longmont allows a sign that is no larger than 18 inches square, and a permit must be obtained prior to installation. Boulder and Broomfield do not allow signs.

_ There is no sale of retail supplies except for incidental retail sales.

_ There can be no exterior storage of materials or equipment.

_ You cannot do anything that would generate glare, noise, vibration, dust, odors, smoke or heat that would be noticeable beyond the property line.

_ You cannot do anything that would generate more traffic than can be accommodated by the home or that is consistent with the normal parking in the area.

According to Michelle Cogswell, a code enforcement inspector with the city of Longmont, the final two policies are the ones violated most often that cause the most complaints. However, complaints are still not a large problem.

“In comparison to other code violations we work on every day, they are fairly rare,” she said.

“Here in Longmont, home occupations are an allowed accessory use with rules most average people can meet,” she explained. “The typical home-based businesses, like CPAs, massage therapists, lawyers or mail order businesses, have no problem meeting the conditions, so it typically isn’t an issue.”

Officials with Boulder and Broomfield also stated that complaints about home-based businesses are rare.
Terrance Ware, planning director for the city and county of Broomfield, shared some examples of “home businesses gone wild” that have caused complaints.

_ A building contractor ran his business from his home and began storing equipment and trucks there.

_ A small business became successful and started adding more employees, which is not allowed under the home occupation code.

_ A couple started breeding dogs, which caused increased traffic from potential buyers on the weekends as well as increased noise.

_ A resident started fixing furniture in his garage and neighbors complained about the noise from the equipment.
When Ware’s department receives a complaint, it is given to the code enforcement group. According to Ware, they’ll make some observations by “hanging out in the neighborhood” and driving by the house. Next, they’ll approach the person about whom the complaint was made and make them aware of the situation. They’ll collect information from the homeowner and work to resolve the issue. If the problem is not corrected and follow-up is required, the city will issue a citation to cease and desist. If the problem still continues, the homeowner will be summoned to court.

According to Cogswell, a majority of the businesses she receives complaints about are not registered with the city. The No. 1 cause for complaint, in her experience, is people trying to run auto-repair businesses from their homes, which she said is virtually impossible to do in compliance with city code.

Cogswell said the city makes every effort to work with the homeowner to be sure they understand the requirements and have received all the paperwork before legal actions are pursued.

“Most of the time, most of the home occupations we are out inspecting on can be legal,” Cogswell said. “They just have to make some slight changes to comply.”

The cities of Boulder, Longmont and Broomfield do not keep track of home-based businesses, so no statistics exist on the number of such businesses in the area.

on Facebook on LinkedIn