NSW: Q&A Can You Run a Business from Your Apartment Garage?

We’ve been asked if NSW residents in a strata building can run a business from their apartment garage.

Table of Contents:

• QUESTION: If a strata block of units is zoned residential, can someone operate a manufacturing business from a unit? The person with the manufacturing business does not live in the building but owns the lot.
• QUESTION: Can the Owners Corporation adopt a bylaw prohibiting the conduct of a business or any part thereof on common property?
• QUESTION: A Lot Owner uses their garage for storage and parks their car on the street. The garage is below my apartment and they are constantly removing items and opening and closing the door. Is this nuisance?

Question: If a strata block of units is zoned residential, can someone operate a manufacturing business from a unit? The person with the manufacturing business does not live in the building but owns the lot.

Answer: Review the development consent for the building to determine what activities are permitted with the consent of council and which are absolutely prohibited.

The fact that the property is zoned residential does not mean that some type of manufacturing would not be permitted if approved by council. You would have to review the development consent for the building to determine what activities are permitted with the consent of council and which are absolutely prohibited.

Assuming that the activity is permitted with or without consent of council, the manufacturing lot would have had to have notified the owners corporation if the standard by-law shown below applies to your scheme:

19 Change in use of lot to be notified

An occupier of a lot must notify the owners corporation if the occupier changes the existing use of the lot in a way that may affect the insurance premiums for the strata scheme (for example, if the change of use results in a hazardous activity being carried out on the lot, or results in the lot being used for commercial or industrial purposes rather than residential purposes).

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in Strata News #594.

Question: Can the Owners Corporation adopt a bylaw prohibiting the conduct of a business or any part thereof on common property?

I’m a lot owner in a strata of 10 villas with limited driveway access and on-site parking. A tenant-resident operates a business selling lawnmowers to the public. Over 50 sales in 6 mths.

Can the Owners Corp adopt a bylaw prohibiting the conduct of a business or any part thereof (incl customers parking, loading product into customers vehicles, etc) on common property?

Answer: In NSW, it is unlikely that a by-law prohibiting a business being conducted in or from a lot would be valid.

In NSW, it is unlikely that a by-law prohibiting a business being conducted in or from a lot would be valid. This is because the recent pet by-law decision by the NSW Court of Appeal in Cooper v The Owners – Strata Plan No 58068 [2020] NSWCA 250 means that a by-law that prohibits any activity on a lot when that activity has no adverse impact on the use of other lots or common property is probably invalid. If the activity is being carried out on common property eg items for sale are stored on common property, and the activity restricts other residents using the common property, then the owners corporation could pass a valid by-law prohibiting the activity on common property.

You may already have by-laws that govern this situation. Over the years in NSW, there have been model by-laws on noise, parking on common property, compliance with planning laws, the behaviour of residents and visitors to the strata scheme, and change of use of a lot. It is possible that carrying on a home business of selling lawnmowers already breaches one of the by-laws you already have and if that’s the case then your owners corporation could take legal action such as either or both of the following:

1. Issuing a notice to comply with a by-law and if the by-law is still breached, applying to NCAT for a fine to be imposed on the offender.
2. Applying to NCAT for an order that the offender cease selling lawnmowers from the lot and common property but you would need to apply for mediation at NSW Fair Trading before doing this.

If the home business of selling lawnmowers causes your strata insurance premium to increase, then there is a process in NSW for recovering the increase from the lot’s owner. The lot’s owner must agree to pay that increase, and if they do not, then the owners corporation may apply to NCAT for an order that the lot’s owner pay the increase. Once again, you must apply for mediation before seeking this order. You would probably need assistance from a lawyer and evidence from an insurance broker to prove in NCAT that the premium increased because of this activity.

Under planning law in NSW, generally home businesses, home industries and home occupations are exempt development and do not need planning approval from the local council. However, like all legal rules, there are exceptions depending on the circumstances of the case, so you should speak to a planning officer at your local council to ascertain whether a home business selling lawn mowers in your strata scheme is exempt development or requires planning approval. Under the Environmental Planning & Assessment Act 1979, any person including an owners corporation may apply to the Land & Environment Court to seek an order restraining breaches of planning law and that includes restraining an illegal home business.

Carlo Fini
Lawyer (NSW)

This post appears in Strata News #452.

Question: A tenant is setting up a physiotherapy business in their garage. Could you please tell us what procedures are required for a resident to run a business from their apartment garage?

One of the tenants in our building has decided to set up a business in her Unit’s garage. They are in the process of renovating the space. They are a physiotherapist.

Could you please tell us what procedures have to be undertaken for a resident to run a business from their apartment garage?

Answer: There are many things to consider here.

Many things are required here:

• Does the physiotherapist have or require development consent to operate the business from their garage? While a home business is common within the residential component of an apartment, a health business from a garage is less so. The Owners Corporation’s consent is required for lodgement of a development application.
• Does the subject garage have a restriction on use eg is it a “utility” lot? If so, no business for human occupation may be conducted on that lot.
• Is the running of the physiotherapy business likely to affect the insurance premiums for the strata scheme and has the owners corporation been notified?
• What insurances do they have?
• Has the physiotherapist carried out any fit-out works? If so, they will likely require a by-law to authorise such works. Such by-law must be approved by special resolution in general meeting and then registered on the common property certificate of title.
• Is there adequate ventilation in the garage?

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in Strata News #347.

Have a question about running a business from an apartment garage or something to add to the article? Leave a comment below.

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Read next:

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• NSW: Q&A Keeping Noise in Carparks to a Reasonable Level

This article is not intended to be personal advice and you should not rely on it as a substitute for any form of advice.

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