Legally running a home studio business...

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AjD

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Apologies to denizens of John Sayers forum (I asked this question in another form over there).

The subject: Home-based studio businesses that are operating legally & above board.

Is anyone actually doing this? If so, how did you get proper permission - especially if you've built an outbuilding (or added on to your home)?

I've just finished a few years living in Detroit, home of the world's most famous home studio of all time (Motown, of course). And would you believe it...? Today, Detroit city regulations would never even allow Motown to exist legally. Fact is, ALL home-based businesses that have any sort of visiting clients are illegal in Detroit.

Regardless, I've operated a home studio here under the radar for some time (it's the way it's done here), but now I am in the process of buying a house on 3 acres of land in rural Michigan... (Dexter/Ann Arbor area). I'd like to build a separate studio in an outbuilding behind the main house, or add onto the existing home in some 'major' way.

Question is, though: Even in a rural area, how do I find out if this can be done legally? Do I just say this is simply for a hobby at first (or I'm building an elaborate office/media room?) Or do I take the truthful path, and risk permit rejections and red tape?

This is such a rarely discussed topic (don't know why), & I would love to hear any and all anecdotes from folks who have tried to do this.. the legal way (home business permits, building inspector run-ins, zoning board hearings, etc.)

Best,
Adam Druckman
drawingroom, detroit
 
I skipped the whole building permit thing. I felt confident in my building skills. It was just a few rooms in my garage. But eventually I will get a city inspector to come out and take a look around(at the electrical). Once I apply for a buisiness license I would like to use all the reciepts I have obtained for the right off(income taxes).
 
casenpoint said:
I skipped the whole building permit thing. I felt confident in my building skills. It was just a few rooms in my garage. But eventually I will get a city inspector to come out and take a look around(at the electrical). Once I apply for a buisiness license I would like to use all the reciepts I have obtained for the right off(income taxes).
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If you do that in many municipalities (including here in MN), you would be required to rip the whole thing out, and start over again. This happened to a local Jehovah’s Witness church, when they tried to rebuild their Kingdom Hall (or what ever they call them) without permits. Given the strictness of building codes in CA, I can't imagine it would be any different there. I mean, you guys get earthquakes out there. If you do it without permits, you better hope you NEVER have an inspector in that part of your building, ever.


Light

"Cowards can never be moral."
M.K. Gandhi
 
I've already looked into this, and here's the deal:

How do you run a commercial enterprise in a district that is zoned residential?

Many people, these days, have a home office right?, in which they run a business. Its legal, and certianly above board. Often times clientiel will enter those home businesses for meetings and project updates.

You simply run your studio the same way. Your studio isn't really "Open to the public", instead it is "By appointment only". That last little catch phrase is what makes your endevour legal. And its true too, you're not a retail outlet, allowing people to come and go as they please. If someone wants to record in your studio, they call first, and you set a time; an appointment.

Additionally, people throw parties all the time right? And there's loud music playing until late hours of the night. The street is packed with cars, and most people hardly raise an eyebrow, but to avoid being a nusance on a consistant basis, I'd try to make sure you have as much "off-street" parking as possible. I can easily get 8-10 cars in my driveway, and providing that my construction is sound (pun intended) , noise shouldn't be a problem.

Now, there may be other factors to consider. You city may have a maximum dB allowance, usually measured at the property line. But again, sound construction techniques should ensure you don't exceede that.

Just remember, your business isn't open to the public, its by appointment only.


Post Script
My project was permitted as a Music/Media Room.
 
Check into getting a post office box (either at a US post office or one of the storefront mail stores.)

Usually that will give you a legal street address that the business can use on your business and incorporation documents. Then whereever you record shouldn't matter.
 
The people I record are, uuuuuummmmm "Friends" ya that's it,, friends. They all just have a habit of dropping money on the floor on their way out, that's all. :p
 
You've touched on a few things, so let me expand them out for ya. Good time to get a cup of coffee.

Any major type of construction, commercial or residential, requires permits, and a final inspection at a minimum. This is often viewed as extortion, which to some degree it is.

But, lets say you don't bother with the permits, because you're confident in your framing, finishing, electrical and plumbing abilities. Cool!

And lets say, as a fluke, one of the brand new circuit breakers you install in your breaker box is defective, your studio has a short, and catches on fire and burns to the ground.

Your insurance company is going to assess what happened, and right away going to see the additional wiring you've added. Since you won't be able to produce permit and inspection records (from photocopies at your town hall), they are going to try to weasel out of paying you for your losses.

Yes, acquiring permits and inspections is a hassle, its irritating, and can be expensive especially in major cities, but without doing that part of the process your insurance company has you more by the balls, in a worse-case scenario.

Next, lets talk about a commercial studio in a residential area. Whether its a home studio, or a seperate building "out back", you'll see the most people who have responded suggest its for you "and friends", and quite honestly, thats how most people handle that situation.

But if we go back to the insurance thing for a moment, lets say you've never met me, but I've contracted your studio to record my next album. Cash exchanges hand, and I arrive to record. Sadly, there was a banana peel in your lobby which I slipped on, splitting my head open on the nice hardwood floor.

Now, because you and I are not personal friends, but rather have a client/vendor relationship, I sue you. Your insurance company may not be required to step up to the plate and pay, without you paying for appropriate coverage.

I can assure you that the goal of every insurance company, dispite what they say, is to take your monthly payments forever, and not pay out if they don't have to. Have to, being the letter of the law and the deliberate loopholes and exclusions they put into their contracts. Read your homeowner's policy sometime, its essentially a 10 page comedy routine :)

I'm not saying that any of this will happen. Probably not. But you have to weigh the ongoing insurance costs versus the exposure you have should a worse case scenario happens. Juries often award insane amounts of money to "victims" and in such a scenario, you could lose your studio, your home, your existance very quickly. Again, I'm just painting a worse-case scenario, nothing more.

And for the record, once my home studio is done (2-car garage loft), I will not be having band after band drape through. Its a tiny project studio, which I will be using for my projects for the majority of the time. Any kinda of studio rental, while I may do it sparringly, certainly puts me at risk as I've outlined above.

The other thing to take into consideration is zoning. If you're running a commercial enterprise in a residental neighborhood, you're legally doing two things incorrect. You're not following the zoning rules, but you're also not paying a higher tax rate normally assessed to commercial enterprises. The former is what your neighbors are going to bitch about, the latter is what the municipality is going to bitch about. Again, its just weighing the risks against your gains.

All you need is one person to slip, or one crabby neighbor who peers out the windows at your driveway being a parking lot, and a really nice thing for you could be ruined.

Anyway, the way to find out what is legal versus not legal before you move, build, etc is to simply call the municipality and find out. I call the town all the time asking such questions, and I use my cell phone and block caller ID so they don't know who is calling them. :D.

Hope that helps,
Frederic
 
Michael Jones said:
I've already looked into this, and here's the deal:

How do you run a commercial enterprise in a district that is zoned residential?

Many people, these days, have a home office right?, in which they run a business. Its legal, and certianly above board. Often times clientiel will enter those home businesses for meetings and project updates.

You simply run your studio the same way. Your studio isn't really "Open to the public", instead it is "By appointment only". That last little catch phrase is what makes your endevour legal. And its true too, you're not a retail outlet, allowing people to come and go as they please. If someone wants to record in your studio, they call first, and you set a time; an appointment.
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Michael that is an absurd assumption..... where ever did you get the idea that for a business to be a business it must be open to the general public. Sorry - but the definition does not hold water. You said you "looked into this" - by that do you mean that you hired a lawyer who advised you of this?

Let's see - I could have a home business where I was a telemarketer....... doing nothing but placing telephone calls from my home - I am NEVER open to the public - and yet my home business is just that - a home business.

If you think that setting up a home business by way of "appointment only" is some sort of means of beating zoning regulations - you are very mistaken.

A "By appointment only" business is just that - a business by appointment only. It certainly is open to the general public - due to the fact that anyone in the general public can book the space and make use of your services.

I know a lot of professionals - some in real estate - who you need an appointment before you get into their offices - if you don't have one you will not make it past the guard at the front door - so by your terms - they aren't running businesses?

They would be surprised to find this out.........



Folks,

I spent quite a bit of time at John's site responding to this - most of that response being specific to the zoning regulations where Adam is going to relocate -

The best bit of advice relating to any of this is that the question is different for each and every town in the states....... every town has it's own zoning regulations - and you place yourself at risk to work outside of those regulations.

Get yourself a lawyer who specializes in zoning law - and let them advise you as to the regulations in your area..... they can also represent you directly at zoning meetings when you want your zoning compliance certificate....... the one that your insurance company is going to want to see if your studio burns down - or someone sues you for that accident (you know - the one that will never happen to me).............

Rod
 
What Michael said is exactly what I read a while ago in a recording magazine, though.
 
And the magazine is technically incorrect.

Exceeding the speed limit is technically illegal, but most of us probably do it all the time. And you know what happens when you get caught :D

Also think about this, a lot of new cars have "data storage" in the ECM (engine management computers). There have been cases where the driver, causing an accident was grossly speeding, the ECM recorded this, and the insurance company wouldn't cover the accident - at all.

This is all I'm really trying to say. I'd rather pay a small payment per month to my insurance company, and be "legit" rather than lose my house, my life, my wealth, do to an unfortunate accident either by fire, flood, or someone falling who is visiting the studio.

I'll say that some rules and laws are just plain studio. Others make a lot of sense. But if you don't comply whether they make sense or not, you're just increasing your financial exposure God forbid something awful happens.

If that doesn't carry any weight, thats okay, but I'll assume you've never slipped, fallen, been in a car accident, had something fall off a shelf, etc.

Remember, we're a society of "its not my fault, let me sue you" these days.

Ever see a newbie guitarist tighten a string too tight, and it snaps, whips around, and slices his cheek slightly? I have.

If it happens in your studio, ITS YOUR FAULT. :D
 
Rod Gervais said:
Michael that is an absurd assumption..... where ever did you get the idea that for a business to be a business it must be open to the general public. Sorry - but the definition does not hold water. You said you "looked into this" - by that do you mean that you hired a lawyer who advised you of this?

Let's see - I could have a home business where I was a telemarketer....... doing nothing but placing telephone calls from my home - I am NEVER open to the public - and yet my home business is just that - a home business.

If you think that setting up a home business by way of "appointment only" is some sort of means of beating zoning regulations - you are very mistaken.

A "By appointment only" business is just that - a business by appointment only. It certainly is open to the general public - due to the fact that anyone in the general public can book the space and make use of your services.

I know a lot of professionals - some in real estate - who you need an appointment before you get into their offices - if you don't have one you will not make it past the guard at the front door - so by your terms - they aren't running businesses?

They would be surprised to find this out.........



Folks,

I spent quite a bit of time at John's site responding to this - most of that response being specific to the zoning regulations where Adam is going to relocate -

The best bit of advice relating to any of this is that the question is different for each and every town in the states....... every town has it's own zoning regulations - and you place yourself at risk to work outside of those regulations.

Get yourself a lawyer who specializes in zoning law - and let them advise you as to the regulations in your area..... they can also represent you directly at zoning meetings when you want your zoning compliance certificate....... the one that your insurance company is going to want to see if your studio burns down - or someone sues you for that accident (you know - the one that will never happen to me).............

Rod
Click to expand...

All due respect Rod, but its not an "absurd assumption", its "letter of the law".
I did not say that a business has to be open to the public to be considered a business. I currently run a consulting business from my home, and its perfectly legal. If anyone wants to contract my consulting services, they need an appointment first.
It is not against zoning regulations (in my area) to run a home business that provides a service, be it recording, or consulting.
It is however, against zoning regulations to run a commericial or retail outlet, that allows people to "shop" or as the zoning regulations put it: "to carry an inventory of items for people to purchase."

And, yes, I have a lawyer that specializes in what's known as Texas Land Law, that covers (among other things) zoning regulations.

But you're right, you need to look into your own local zoning regulations.
Things are definately done differently in Texas than they are in Conneticut, eh. ;)
 
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Michael Jones said:
All due respect Rod, but its not an "absurd assumption", its "letter of the law".

I did not say that a business has to be open to the public to be considered a business. I currently run a consulting business from my home, and its perfectly legal. If anyone wants to contract my consulting services, they need an appointment first.
Click to expand...

But that doesn't change the fact that you must be in compliance with the zoning regulations and are.

It has nothing to do with "by appointment" or "open to the public". And that was how you described the situation - generically stating that you've reasearched this and if they do "A" then it's legal, and that may not be the case everywhere in the USA.

"It is not against zoning regulations (in my area) to run a home business that provides a service, be it recording, or consulting."
Click to expand...

OK - now that I will buy - the addition of "(in my area)" ....... because in the case of Adam's new area - it specifically states in the definitions:

Home Occupation: Any use customarily conducted entirely within a dwelling which is clearly incidental and secondary to the residential use of the lot; does not change the character of the dwelling, and meets all applicable provisions of this Ordinance.

I would find it difficult to argue that professional commercial studios are "customarily conducted entirely within a dwelling". That coupled with the fact that they establish (once again in the zoning regulations in his town) that it has to be within the dwelling - (it can't be a seperate outbuilding) and it cannot exceed 20% of the dwelling gross floor area........

So they would allow you 480sf of space for a 2,400sf home - but that would be one very small studio.

In a town adjorning Adam's new location - they specifically allow for the one on one training in musical instruments as an allowable home occupation - but not more than one on one.

Anyway - i intended no offense to you - but think we have to be carefull how we approach things on the internet - people take things to heart - and the manner in which you presented this made it appear that what worked for you works everywhere - and i know this to not be the case......

Sincerely,

Rod
 
Michael Jone's post is correct for Texas.. at least Austin and Houston.

Though they may not be the same for every city or state, it is an avenue for Adam to explore to see if the same nitch would apply to his locations regulations. But it is a fair assumption, when posting about law, that each post pertains to the postee's location.

I would not dive blindly into a project based on the law advice from someone in California or New York. And, I would hope that Adam would not do the same for someone based in Texas. But, that does not invalidate the purpose of the post.
 
Rod Gervais said:
Anyway - i intended no offense to you - but think we have to be carefull how we approach things on the internet - people take things to heart - and the manner in which you presented this made it appear that what worked for you works everywhere - and i know this to not be the case......

Sincerely,

Rod
Click to expand...
None taken Rod.
I do tend to "shoot from the hip" when posting.
Sort of a Ready... Fire... Aim! disposition.
So, yeah; point well taken.
Its not my intention to mislead, just to pass along MY findings.

I'm actually pretty proud of the fact that I haven't circumvented any code or regulation in my project.
And it is compliant with zoning regulations at the time of permit issuance.

(The City of Austin doesn't actually "approve" anything; they simply review for code compliance)
 
The cover sheet from my permit set.
 

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Oh!
Hey!
I almost forgot, Rod, do you have a link to those "putty packs"?
I can't find them locally, so I'm going to have to order them.
 
Well, late back to the party to my own thread... good to see there's some real meaty discussion on this. As I said, I've found it really hard to find much info on this topic.

Michael, you are the first guy I've found who's actually running a fully legal home studio business (with home rennovations, no less!), as opposed to doing things 'under the radar.'

Couple questions: You don't say whether your rennovated studio is an in-home studio, or a separate outbuilding on your residential property. Which is it?

Also, I'm curious about those plans (the photo you posted). It mentions a Media Room, Game Room & Play Room. No mention of tracking rooms, ISO booths, or control room. Was this by-design? (To help get the plans thru?)

Best,
AjD

P.S. For more details on my own construction planning saga, check out the thread on the John Sayer's board here (it's not for the faint of heart):

http://www.johnlsayers.com/phpBB2/viewtopic.php?t=1646
 
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