How has the COVID-19 pandemic changed the work environment?
There have been two major changes to the work environment due to the COVID-19 pandemic:
- More remote work opportunities.
- More people are starting businesses out of their homes.
Many businesses were forced to temporarily shift to remote working. Due to the success of this, remote work is still heavily used. Many employees are insisting on remote working environments. Due to the tight labor market, many more employers offer remote positions to appeal to applicants.
Along those same lines, many workers who were laid off during the pandemic, or had their hours cut, shifted to working for themselves at home. Due to the labor shortage and business closures, in many industries, independent contractors and freelancers have seen higher than usual demand for their services.
What are the potential costs of working from home that might affect landlords?
When tenants work from home, they might have different expectations for their living environment, which might add extra expenses for the landlord. There are other potential costs for landlords, too. Here are some potential costs:
- Landlords who pay utility bills may notice an increase in utility costs.
- Wear and tear on the rental unit may increase if people are home more.
- Insurance premiums may increase if tenants invite clients to their unit.
- If remote working tenants are bothering other tenants, it may lead to complaints and conflicts, which may be costly to resolve.
- Penalties and fees for violating local codes or zoning ordinances that ban operating businesses in residential areas.
If you decide to cover the increased costs with a rent increase at the end of the lease term, you may want to use a Rent Increase Letter to give appropriate notice of the new rental payments.
What are some legal issues to think about when tenants work from home?
It is a good idea for landlords to be aware of several possible legal ramifications if tenants are working from home.
Potential liability if tenants have clients come to the property.
As the property owner, you might be liable if someone is injured on your property. You may be sued for things like structural defects or lack of maintenance that led to an injury. Even if you pass responsibilities such as snow shoveling to your tenant, you might still be named in a lawsuit. And even if you successfully defend against a lawsuit, you may still have legal costs.
Consider ensuring your property insurance covers work-from-home liability.
You may already have insurance to protect yourself from liability. A standard homeowner’s policy, however, may not cover risks associated with renting your property.
While a landlord’s policy can protect you in case something goes wrong, you may want to talk to your agent or review your current insurance policy for any restrictions on commercial activities before allowing your tenants to work from home, or run their business from your property.
Defining work-from-home in the lease.
It is common for a Lease Agreement to restrict work from home. For example, landlords commonly do not allow tenants to park commercial vehicles on the property, store inventory, or to have business clients come to a rental home. It is also common for a lease to explicitly allow only remote electronic work.
If you previously did not allow working from home and want to allow certain types of remote work, consider having the tenant sign a Lease Amendment with updated rules. This might help protect you in case you consider filing an Eviction Notice if a tenant violates your rules.
Zoning issue for some commercial work.
Zoning requirements and occupancy rules vary by area. Some local governments technically do not allow any type of business activity, while others impose restrictions. As a landlord, consider taking the time to understand whether your area holds the property owner, rather than tenants, responsible for code violations.
Liability for work-from-home remote desk jobs.
When it comes to desk jobs that tenants are doing by computer or phone, there is little potential added liability for landlords. Even though those tenants are working, they are engaged in similar activities to what people regularly do in their homes.
Can I treat work-from-home the same as running a business from home?
While zoning laws might differ, work-from-home tenants and those running a business from home often have similar impacts on rental properties and landlords. Depending on the business, however, there may be big differences that make significantly larger impacts.
Landlords commonly restrict business activities like storing inventory, especially if that inventory creates hazards or crowds common areas with deliveries. You might consider adding restrictions on things like receiving business mail or using the rental home as a registered business address.
While landlords might not be able to restrict tenants from working from home for an employer, landlords might be able to restrict tenants from having clients in their rental for their work-from-home business. This is a common restriction in Lease Agreements and, in many places, it may even be required by zoning ordinances or other codes.
If you suspect that a tenant is violating zoning ordinances, you may want to consider speaking to them about the zoning regulations. If they do not heed your warning, you might want to talk to a lawyer about your options.
How do I know if a tenant is working from home?
When you screen tenants, you might ask them who they work for and whether they work remotely. Seeing commercial equipment being delivered or during an inspection, or frequent guests coming and going, may also be signs that a tenant is running a business from home. Because many restrictions on working from home are to keep tenants from disturbing others, many landlords may not take action until it’s too late, or there is a complaint or obvious issue.
If you have more questions about tenants working remotely or running a business from your residential rental, reach out to a Rocket Lawyer network attorney for affordable legal advice.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.