Home-based Businesses Surge in HOAs During COVID-19

Learning pods, at-home daycares, and hair salons operating out of garages are popping up in communities across the country as residents try to navigate the challenges caused by the COVID-19 pandemic.

According to a recent CAI survey, 67% of respondents have noticed an increase in home-based businesses operating in their community during the pandemic. Despite the rise, 83% say that the covenants restrict home-based businesses from opening up shop in their homeowners association.

Additionally, respondents report paying extra attention to community services, operations, and governance now that they are spending more time at home. It’s no surprise that 63% say there have been more noise complaints, and more than half say there has been in an increase in trash and recycling as well as a jump in package deliveries—including groceries, lunches, and dinners.

However, as COVID-19 forced communities to adapt and switch from holding in-person gatherings to virtual meetings and socially distanced events, boards are being more flexible with home-based businesses as well. Roughly 73% of respondents note that their association is being more lenient with residents’ request to operate a business from home, such as a daycare or school learning pod.

Learning pods, where a teacher is hired to work in a home with a family’s children or several neighborhood kids when schools are conducting distance learning, has become extremely popular during the pandemic.

At Hilton Head Plantation Property Owners’ Association in South Carolina, many counselors from the community’s summer camp were hired by residents for child care. Parents coordinated to get neighborhood kids together so counselors could provide backyard mini sports camps and other activities to keep them busy, according to General Manager T. Peter Kristian, CMCA, LSM, PCAM, a CAI past president. 

William Z. Kolobaric, a condominium and real estate attorney with Hirzel Law in Farmington, Mich., says most of the firm’s estimated 300 Greater Detroit-area communities are being more flexible with home-based businesses “unless there is an inordinate amount of traffic, noise,” or other negative impact.

“The boards understand that these are not normal times, and there is no benefit to litigating matters where it is truly uncertain how a court will weigh the competing values of protecting a community, and upholding the contractual provisions found in the governing documents, against the societal values of protecting an individual from the unknown consequences of the virus and forcing them to go to work when they can work from home,” Kolobaric explains.

CAI encourages community associations to adopt use restrictions pertaining to home-based businesses that are reasonable, flexible, and applied uniformly according to objective criteria that are set forth in the governing documents or rules and regulations.

For more information, check out CAI’s public policy on home-based businesses in community associations.

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