Community Associations Institute (CAI) recognizes and supports the rights of residential common-interest communities to regulate commercial activities within their communities. This includes the right to restrict those commercial activities that are conducted from within individual homes constituting home-based businesses if the commercial nature of the activity is obvious to others in the community and otherwise inconsistent with usual residential living.
Individuals are entitled to reasonably enjoy the use and privacy of their individual homes. Certain types of home-based occupations allow individuals to pursue a livelihood and are not apparent to others outside of the home, therefore causing no adverse effect whatsoever on the community. In order to distinguish objectively between those discrete home-based businesses that should be permitted and those that should be prohibited, CAI suggests that Boards of Directors (boards) do not focus on the nature of the business conducted (as long as legal). Rather, boards are encouraged to analyze several factors to determine whether the business is apparent beyond the four corners of the home, examples:
CAI encourages associations to adopt use restrictions pertaining to home-based businesses that are reasonable and flexible and applied uniformly according to objective criteria, which are set forth in the governing documents or rules and regulations.
Consider the following type of language as a guide:
"Homes shall be used only as private single-family residences and such other uses as may be permitted under federal, state or municipal statutes or ordinances. An owner or occupant residing in a home may conduct discrete business activities within the home so long as the existence or operation of the business activity is not apparent or detectable by sight, sound or smell from outside the home; the business activity does not involve regular visitation to the home or door-to-door solicitation of community residents; and the business activity is consistent with the residential character of the community; and does not violate these Use Restrictions. Examples of discrete business activities include, but are not limited to, electronic communication, literary, artistic or craft activities or possible childcare arrangements. The board may in its sole discretion restrict any business activities that it determines reasonably interfere with the enjoyment of the residential purpose of the community association."