Is Operating a Business Out of Your Home Illegal in Nashville?
With over 1,600 home-based businesses operating in the city of Nashville, Tennessee, could it be true that many of them are illegal?¹ Section 17.16.250 of Title 17 of the Metropolitan Code of Laws that governs residential zoning ordinances contains a provision regarding “home occupations”.² The term home occupations refers to the practice of individuals operating small businesses from their residential homes. The provision prohibits the home occupations, or home businesses, from performing services for customers on their residential property. For many home businesses, customers and customer interaction are the sole source of profit. In “Music City,” a community full of artists, musicians, and other creative professionals, this ordinance presents several problems for those wanting to teach music and art or even to create music and art with other professionals in the industry.
This exact zoning ordinance presented an issue for a local Nashville music producer, Lij Shaw. Since 2015, Mr. Shaw has been in a battle with the City of Nashville to shut down the prosperous music studio located in his residential home. Mr. Shaw first received a letter from the city demanding his home music studio be closed and no longer open for business. Two years later, Mr. Shaw partnered with Pat Raynor, an individual running a hair salon out of her home and protested the residential zoning ordinance in court. The legal battle between Mr. Shaw and the City of Nashville was recently heard by the Supreme Court of Tennessee. The decision of the Supreme Court of Tennessee will not be released for several months.
Can Owners Conduct Business From Their Home During Covid-19?
As the COVID-19 pandemic persisted, the Nashville Metropolitan community was afforded the opportunity to operate small businesses from their residential homes, with a newly added benefit. On July 7, 2020, Nashville Metro Council approved the Home Occupation Modernization Bill (bl2019-48) in order to allow small business owners to continue to profit from their businesses in the safety and security of their own homes. This ordinance additionally allows business owners in Davidson County, for the very first time in the county’s history, to engage with customers in the business owner’s home legally. However, the Bill contains several restrictions as follows: a restriction that no more than five employees may reside within the dwelling at a home occupation location; a restriction that no more than one part-time or full-time employee not living within the dwelling may work at the home business; that there can be a maximum of six visits by customers per day; and no more than three customer trips per hour are allowed at the site of the home business.
Why Should Nashville Small Business Owners Care?
In the current COVID-19 landscape, the opportunity to run a business out of your home and be able to serve customers at that business is highly valuable. Businesses based in a residential home afford individuals with an easily attainable avenue to entrepreneurship. It also presents small business owners with a much more cost-effective way to conduct business, avoiding the expenditure of renting or purchasing a commercial space. Reducing the cost to start up a business can be a great asset to the longevity of the business and help reduce the risks associated with starting a business.
The Home Occupation Modernization Bill is set to expire in January of 2023. Upon expiration, it will again be illegal for home businesses to serve customers on site in a residential home. However, with the help of Mr. Shaw, Mrs. Raynor, and other like-minded individuals, the residential zoning ordinance prohibiting customers to enter and to be served by home businesses may no longer exist.
If you are thinking about starting a business, we can help. Just call an Entrepreneurial Business Attorney at Cole Law Group in Brentwood (615-490-6020) and we will be happy to speak with you about your new business venture.
1 https://ij.org/report/finding-american-dream-home; see also http://www.tnledger.com/editorial/article.aspx?id=52959.
2 Metro. Code § 17.16.250(D)(1).