Tenant running holistic therapy business without permission

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Mowelb

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When tenant moved in 2 years ago we tried to get landlord insured which would cover her to carry out her holistic therapy business from the property. We could not get any. She agreed to find outside premises and would only use our house for occas pamper evening for her friends (non commercial). The tenancy contract forbids any business to be carried out. We have now discovered on Facebook that she intends to use our house and is advertising a full range of therapy treatments, taking bookings and issuing vouchers. What is our best course of action.
 
This would worry me if I was the landlord. You may not like what you hear.

Personally I would not allow a tenant to carry out any commercial business from a house. If I found out I would give a notice to stop or the lease would be broken. See what you have written in your contract and if there is a line saying no commercial business allowed. Take a screenshot of the advertisement and date and time it.
From your post above you knew they had a holistic business before they moved in. If you want to keep the tenant then write a letter to the tenant that they need to rent a premises away from the house and not run a business from a residential property. They can rent a place in a salon. If they continue then give notice.

This is a big risk to you if here is a fire or damage. You knew they had a business and they could possibly be using your property.
Your landlord insurance might be void. You may have called the insurers and disclosed this. If the tenant has a fire and the insurers find out that a business was run from the house they may not pay out. The tenant would move on and then you have to find the money to repair it.

The neighbours might complain to your or the Council if her business takes off. You need to apply for change of use to commercial premises and all that includes water rates, land rates etc. There is a cost involved and more than likely the neighbours may refuse.

Do you know if they have insurance? If someone walks in the house and trips while visiting the tenants business they may sue the person but they will definitely will try you if the person does not have insurance. Big headache for you not your tenant.
 
Sconeandjam said:
This would worry me if I was the landlord. You may not like what you hear.

Personally I would not allow a tenant to carry out any commercial business from a house. If I found out I would give a notice to stop or the lease would be broken. See what you have written in your contract and if there is a line saying no commercial business allowed. Take a screenshot of the advertisement and date and time it.
From your post above you knew they had a holistic business before they moved in. If you want to keep the tenant then write a letter to the tenant that they need to rent a premises away from the house and not run a business from a residential property. They can rent a please in a salon. If they continue then give notice.

This is a big risk to you if here is a fire or damage. You knew they had a business and they could possibly be using your property.
Your landlord insurance might be void. You may have called the insurers and disclosed this. If the tenant has a fire and the insurers find out that a business was run from the house they may not pay out. The tenant would move on and then you have to find the money to repair it.

The neighbours might complain to your or the council if her business takes off. You need to apply for change of use to commercial premises and all that includes water rates, land rates etc. There is a cost involved and more than likely the neighbours may refuse.
Do you know if they have insurance? If someone walks in the house and trips while visiting the tenants business the may sue the person but they will definately will try you if the person does not have insurance. Big headache for you not your tenant.
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Thank you very much for your helpful reply. I have been reading the RTB site and it appears to give the tenant all the rights and landlord very few. would this come under ruling of “ tenants responsibilities “
 
The tenant is in clear breach of the lease by the sounds of it. I had the misfortune of a tenant running a food delivery business out of my house. Kitchen destroyed. Don't wait for something to go wrong if you know up front. Issue a termination notice.
 
@Mowelb

The tenant is in clear breach of the Residental Tenancies Act 2004 (as amended). Section 16 says:

16.—In addition to the obligations arising by or under any other enactment, a tenant of a dwelling shall—

( m) not use the dwelling or cause it to be used for any purpose other than as a dwelling without the written consent of the landlord (which consent the landlord may, in his or her discretion, withhold),
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Section 34 of the Act then allows you to issue a notice of termination after written notice has been issued to the tenant:

1. The tenant has failed to comply with any of his or her obligations F85 [ (other than the obligation to which paragraph (a) of section 16 applies) ] in relation to the tenancy (whether arising under this Act or otherwise) and, unless the failure provides an excepted basis for termination—

( a) the tenant has been notified F86 [ in writing ] of the failure by the landlord and that notification states that the landlord is entitled to terminate the tenancy if the failure is not remedied within a reasonable time specified in that notification, and

( b) the tenant does not remedy the failure within that specified time.
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If it was me I would do the following:

  1. Gather as much evidence as you can about house being used as a place of business. A friend could even attempt to set up an appointment via FB;
  2. Issue a written warning that you have knowledge that the place is being used as a business in breach of tenant's obligations, there is almost certainly a line in the lease about this but even if there isn't it shouldn't matter;
  3. Issue another warning letter after 28 days if the business has not ceased saying next step is termination;
  4. Wait another 28 days and issue a written termination notice on the grounds above;
  5. Talk to tenant and say that you will withdraw it if she stops operating the business.
You can take step 5 before 2, 3, or 4, you know your tenant best. However if you think it will go to the RTB you should start formally and then try to resolve informally. Resolution with the RTB takes time and informal efforts count for nothing. Make sure to put all relevant detail into the letters. Send them by registered post as well so she can't claim she wasn't advised.

Let us know how you get on!
 
Thank you all for your help. We gathered all the evidence we could find. We asked the tenant to stop advertising and using our address for her therapy business. She was told by email that if she didn’t her contract would be terminated. She increased advertising on Facebook over Christmas period and stopped communicating with us. She is now using WhatsApp so we are unable to follow her activity.

We saw a solicitor early January and have instructed him to issue her with a notice terminating the contract. We have to give her 120 days notice. Apparently email letters are acceptable so landlords beware. Because of this we will not be renting out the house again and are looking at alternates to cover upkeep costs such as holiday lets.

I will let you know the outcome in 4 months. Thanks again for your advice.
 
Do you have to give 120 days notice even when she's in breach of her tenancy conditions?
 
According to our solicitor because we did not specify a notice period in the contract. She is a friend so we did not think there would be problems!!!
 
Mowelb said:
According to our solicitor because we did not specify a notice period in the contract. She is a friend so we did not think there would be problems!!!
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That's a bit odd. If it's a normal notification of tenancy I don't think the contract matters really, the periods in the Residental Tenancies Act are binding.
 
Mowelb said:
When tenant moved in 2 years ago we tried to get landlord insured which would cover her to carry out her holistic therapy business from the property. We could not get any.
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Hardly surprising. You cannot get commercial insurance for premises zoned as residential
 
No, the landlord cannot decide to allow commercial use of a residential property unless the property is rezoned for commercial use by the LA.

And vice versa. Or mixed-use decisions
 
mathepac said:
No, the landlord cannot decide to allow commercial use of a residential property unless the property is rezoned for commercial use by the LA.

And vice versa. Or mixed-use decisions
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Thousands of such businesses operate across the country without that planning (including the example that is the subject of this thread), so while in theory the LA get a say, the primary authority is the landlord. Ruling out commercial activity in the lease would overrule the LA's role in granting permission.
 
Just because we have an appallingly lax attitude to law enforcement, planning, traffic, licencing and criminal, doesn't mean authority cedes to the property owner. In decisions like "allowing" commercial activity from a residential premises, the landlord has no authority, zero. Crappy local authorities, corrupt councillors and/or lazy LA officials don't alter the chain of command or responsibility.
 
A landlord can insist on a term that says, for instance, smoking is not allowed in the dwelling. S/he can equally insist on a term saying no commercial activities can be carried on from the premises. If this is accepted and signed, it is an inherent part of the tenancy agreement. A termination notice can be served for breach of tenant obligations, complying of course with all relevant RTB regulations and notice periods.
 
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