Kathleen Johnston Back - Ventura County Bar Association

12 CITATIONS • NOVEMBER 2008Municipal Law Report: Regulation of Home BusinessesBy Scott Taylor, Esq.Solo attorneys who register their homeaddress as a “business” address may besurprised to learn that, like other home-basedbusiness owners, they are required to obtaina “Home Occupation Permit” from their cityof residence. This local permit is in additionto the requirement of most municipalitiesthat owners obtain one or more businesstax certificates (licenses) before conductingany business, trade, profession, enterprise,establishment or occupation. While abusiness tax certificate must be regularlyrenewed, and may be required from each citywhere work is performed, a home occupationpermit may only be required on a one-timebasis, upon an inspection certifying that theuse does not diminish the usable parkingspace in the owner’s garage or violate specificzoning regulations or restrictions.Permit application provisions vary amongmunicipalities. Most Ventura Countycities require a home occupation permit.All cities also prohibit outside storage andadvertising signage as conditions of thepermit. The cities, however, vary when itcomes to allowing employees and customersat the residence. For example, the Cityof Camarillo prohibits any employmentin the home other than resident familymembers, and prohibits customers on thepremises except for certain expressly definedinstructional or tutorial uses. Other cities,such as Thousand Oaks and Ventura, permitnon-family employees. Some cities limit thenumber of customers allowed. For example,the County of Ventura limits the number ofcustomers at the residence to no more thansix per day and only between the hours of8:00 am and 5:00 pm. The permit variancesare driven by each municipality’s uniqueneeds. For example, Bob Burrow, Camarillo’sDirector of Community Development, notesthat in cities with many resident writers,a one-employee provision is common, inrecognition that such writers may require ascript assistant.Local zoning laws are intended to preservethe character of a neighborhood that is zonedresidential, to limit nuisances arising fromcommercial uses, and to ensure public safety.According to a 2004 study commissioned bythe Office of Advocacy, U.S. Small BusinessAdministration, there has been “a broadmovement” in the past decade to adoptprovisions reducing the regulatory burdenson home businesses. This is due in part tothe recognition that home-based businessesmake up roughly half of all United Statesbusinesses, and are a strong economic force intheir respective communities. In Camarillo,for example, there are approximately 6,100home-based businesses operating underHome Occupation Permits.Generally permitted home-based businessesinclude attorneys, accountants, appraisers,e-bay re-sellers, construction or landscapecontractors, tutors, software developers,consultants, writers, and agents. Generallyprohibited home-based businesses includeadult entertainment businesses, repairshops (although some municipalities allowsmall-appliance repair), animal-relatedbusinesses, food-related businesses, or anyother uses that are deemed incompatiblewith residential activities. For obviousreasons, uses that require storage of toxicor highly combustible materials are notpermitted. Because of the variety of businessapplicants, most cities apply local provisionsto determine permitted and prohibited useson a case-by-case basis, rather than providingspecific examples of such uses.Generally, home business owners are notpermitted to advertise their home addresseson business cards or elsewhere, althoughpublication of a phone number is acceptable.Further, all municipalities in Ventura Countyprohibit any type of signage at the residenceadvertising a business.Municipalities generally have neither theresources nor the inclination to enforcehome occupation permits unless a neighborcalls to complain. A letter from the city maybe the first time an owner realizes a permitis required. The County of Ventura issueshome occupation permits but does notconduct on-site inspections. The Countyrequires a permit only to verify that theproposed use is commensurate with thespecific land use zone.Once a municipal agency (i.e., codeenforcement) receives notification of analleged unauthorized use, a letter is typicallysent to the business owner indicating that ahome occupation permit and tax certificate/business license is required to lawfully operatethe business from their home. All agencies,except for the County, conduct residentialproperty inspections to insure that thebusiness use does not impact the neighborsor the dynamics of the neighborhood. Forexample, a contractor who wishes to turn hisresidential property into an industrial storageyard would be prohibited from such use.Similarly, a home-based attorney who wishesto utilize his garage as a records and case filestorage unit may be prohibited from thatuse if it diminishes the usable parking area.CITATIONS editorial board memberand solo practitioner Karen Darnall earnsa modest income as a freelance violinist.Many years before moving into her currentCamarillo office, Darnall found about homebusiness regulation in an unusual manner.She and four other musicians had formed agroup, “Fiori Musicali,” and advertised inthe Yellow Pages. A competing musiciancomplained to City Hall that Darnall,the general partner, had failed to obtaina business license in Camarillo. WhenDarnall responded to the City’s inquiry,she acknowledged that her garage was toocluttered to pass a “home occupation”inspection. A City official helped her finessethe situation by allowing her to purchasea business license without undergoinginspection. In contrast, home-based businessowners who disregard a notice of violationmay face penalties ranging from the issuanceof an administrative citation, resultingin a monetary fine to being named in acriminal or civil complaint – admittedly arare result.There is an important legal advantage tobeing properly licensed and permitted. Ahome-based business owner who brings acontract action may need to prove properlicensing to overcome a defense of illegality.Thus, it is in business owners’ advantage tocomply with local zoning rules, especiallybased on the small investment in time and