How can I run a business from my home?
How can you run a business from your home? Given the economic difficulties linked to the health crisis, many small and medium-sized businesses have been forced to leave their commercial premises due to a lack of funds and often no clear prospects for the future.
GOLDWIN is working with these small and medium-sized businesses, as well as a large number of property managers, to put in place calm, sustainable, and more economical conditions for running their business.
The first point to check when you want to run a business in your home is the co-ownership regulations.
Two clauses are particularly important in this respect:
- The clause relating to the purpose of the building;
- those defining the use of private or private areas.
You should therefore pay particular attention to the co-ownership regulations, and in particular to the two clauses mentioned above to ensure that you are permitted to carry on a commercial activity.
Naturally, if it is not, it will be necessary either to obtain authorization from the general meeting of co-owners to carry on this activity or to opt for legal action, which will be determined on the basis of the particular situation of the co-owner and the stipulations of the co-ownership regulations.
If the co-ownership regulations do not prohibit the operation of a commercial activity, it may be necessary to apply to the Town Hall for authorization to change the use of the premises in order to carry out the activity.
What is a change of use?
A change of use involves removing an existing dwelling to give it a different use. In some cases, this is a prerequisite for carrying on a commercial activity in a dwelling.
The concept of change of use must be distinguished from that of change of use.
A change of use is governed by the Code de la construction et de l’habitation (Building and Housing Code), while a change of use is subject to the rules set out in the Code de l’urbanisme (Town Planning Code).
In addition, the use of a property, as defined in article L. 631-7 et seq. of the Code de la construction et de l’habitation, refers to the use made of it by its occupier, i.e. living in it or carrying out a commercial or professional activity.
Any change of use of a property must be authorized in advance by the local council, and in Paris, after obtaining the opinion of the Mayor of the arrondissement in which the property concerned is located.
The concept of use refers to the technical purpose for which the premises were designed.
The different uses of buildings are defined and categorized by the provisions of the Code de l’urbanisme, and any change of use must be subject to planning permission, obtained either by submitting an application for planning permission (if the work envisaged so requires) or by submitting a prior declaration.
Therefore, when a change of use permit is required for a commercial activity in a dwelling, planning permission must also be obtained for the change of use of the premises concerned.
The reason why change of use is subject to strict regulations is to prevent too great a reduction in the number of homes, particularly in Paris and all other major cities.
The aim of these rules is to combat the shortage of accommodation, which has grown enormously in recent years as a result of the abusive and illegal use of platforms such as AIRBNB, ABRITEL and BOOKING.
Given the specific features and the precise, highly specialized technical aspects involved in applying for and obtaining change-of-use and change-of-purpose authorisations, it is essential to be assisted by a lawyer specializing in this type of issue.
Starting up, monitoring, and bringing to fruition a project to carry on a commercial activity in a dwelling requires specific and precise know-how and skills, as such a project intertwines co-ownership law, construction law, property law and town planning law.
When is it necessary to obtain authorization for a change of use?
In reality, if you want to use your home for a commercial activity, you will need to obtain authorization for a change of use.
There are only a few exceptions to the principle of change-of-use authorization, which are strictly regulated by the Code de la construction et de l’habitation.
Firstly, it is possible for the occupant of premises used for residential purposes to carry on a commercial activity in part of these premises if they are their main residence and they receive no customers or goods there.
This exception to the requirement to obtain authorization for a change of use is very restrictive, as only the occupier may carry on the said activity, which excludes the employment of employees.
In addition, the occupier must continue to live in the premises, which must in this respect constitute their principal residence, i.e., the accommodation they occupy for more than eight months of the year.
Similarly, it is totally forbidden to receive merchandise or customers.
However, if the residential premises are located on the ground floor of the building, it is possible to carry on a commercial activity under exactly the same conditions as those set out above, although in this case the ban on receiving goods and customers no longer applies.
In the event that the premises concerned are low-cost housing, it will also be necessary to obtain authorization from the Town Hall.
Lastly, the commercial activity must not give rise to any nuisance or danger for the neighborhood.
In this respect, it should be remembered once again that carrying on such a business must not be prohibited by the co-ownership regulations or by the residential lease in the case of a tenant.
In all cases other than those mentioned above, prior authorization should be sought from the Town Hall for a change of use, provided that the proposed activity does not cause a nuisance or danger to the neighborhood or lead to any damage to the building.
How do I obtain authorization for a change of use in Paris?
In Paris, change-of-use authorizations are granted on the basis of social diversity objectives, the balance between housing and employment, and the shortage of housing in the various districts of the city.
Therefore, to obtain a change-of-use permit in Paris, it is necessary to provide compensation in the form of the simultaneous conversion of premises used for other purposes to residential use.
These compensation requirements follow strict and technical rules that are briefly summarized below.
Firstly, the premises proposed for offsetting must cumulatively :
- Correspond to housing units and be of equivalent quality and surface area to those subject to the change of use. The premises provided as compensation must meet decency standards and must not constitute an extension to an existing dwelling.
- They must be located in the same arrondissement as the residential premises that are the subject of the change of use.
In addition, the City of Paris by-laws define a geographical sector known as the “reinforced compensation” sector.
In this sector, the surface area of the premises proposed for compensation must be double that of the premises for which the change of use is requested, unless the premises are to be converted into social rental accommodation.
If the premises proposed for compensation are converted into social rental housing, they may be located throughout the “reinforced compensation” sector.
Furthermore, if the converted premises are located in the 1st, 2nd, 4th, 5th, 6th, 7th, 8th and 9th arrondissements, no more than 50% of the converted surface area may be compensated for outside the arrondissement where the conversion takes place.
In the 3rd, 10th, 14th, 15th, 16th, 17th and 18th arrondissements, the number of dwellings offered as compensation must be at least identical to the number of dwellings removed.
In certain specific cases, exceptions are made to the compensation requirement, in particular :
- In the case of a change-of-use authorisation granted for a public-interest purpose;
- In the case of a change of use authorisation granted for the exercise of a liberal profession, subject to certain conditions;
- In the case of a change of use authorisation granted for specific activities carried out on the ground floor: i.e. the activities of liberal professions, craftsmen, or the premises of an association or foundation. This authorisation is limited to a specific surface area in certain arrondissements.
Finally, if the surface area reserved for a use other than residential is less than 50% of the total surface area of the premises, obtaining authorisation for a change of use is not subject to compensation.
Acquiring marketability, which involves finding premises to offer as compensation, can therefore prove extremely costly in Paris.
The price of commercial space varies from one arrondissement to another, as this market is naturally subject to the vagaries of a speculative market, where the price varies according to supply and demand.
Each case and each project must therefore be carefully analysed to determine the applicable regulations, the permits that need to be obtained and the financial opportunity of carrying out the project.
GOLDWIN’s teams are ready to listen and respond quickly, and will be able to guide and advise you in the realisation of such a project.
The GOLDWIN teams have in-depth expertise in co-ownership law, construction law, real estate law and town planning law, and demonstrate their technical skills and legal creativity.
The technical expertise, creativity and multi-disciplinary approach of the GOLDWIN teams will ensure the successful completion of projects for small and medium-sized businesses.
