Running a business from a residential flat, is it legal?

[fatnfrumpy]

Will also post this in legal!
We are the owner of a top floor flat in a Victorian building.
The building is beautiful and maintained by all freeholders.
There are four flats in total. We all have a share in the freehold and share maintenance costs.
The building insurance is in excess of 1k per annum which means we all pay over £250 per annum.
This seems very high seeing as our other house worth more are around £120 per annum.
So looking into it more deeply it would seem
1, owner/occupied ground floor flat has had several large claims in the last three years for leaks.
2, owner of garden flat does not live there but has converted the three bedroom flat into offices for his market research business. He has employees working on computors for 8hrs per day.
So is our part of the building insurance being penalised for past claims and for business use?
Is it legal to run a business from a residential property?
Is it safe that there are employees working from a garden/basement flat all day?
If the building burnt down because a computor caught on fire from a business would the building insurance pay out?

Yes, you're all paying for the leaks and the business use, assuming the business use has been declared. If it hasn't then your insurance may be invalid.

Yes, it is legal to run a business from a residential as long as the business use is incidental to the residential use. If he has employees working there I suspect he's on dodgy ground.

He should have employers liability insurance and comply with the health and safety regulations (emergency exits, fire extinguishers, eveacuations etc). If you think he hasn't done this you could contact your local HSE and fire officer.

If the business use is declared on the insurance then it will pay out, as long as the terms of the insurance haven't been breached. But, most residential insurance won't cover for business use where you have employees working there so you may have a problem.

I suggest you check the insurance paperwork and call the insurance company if you have any concerns.

We looked into this for dh. Business use has planning implications and if the whole property/flat is being used for business rather than residential then your neighbour should have a change of use. It is unlikely that this would be granted if you share an entrance door hallway if visitors come to the flat. Employees are a grey area. If there is no disruption ( other than insurance costs) i would be loathe to stir up trouble by reporting to the L A as it would have to be declared as a dispute when you come to sell the property.

You're saying that there isn't anyone actually living in the flat? But it's being used as an HQ for a business with employees coming and going?

It would need planning permission for the change of use of from residential flat to business use. Can be applied for retrospectively.

In determining the planning application the local planning authority would be looking at the impact that the use would have on nearby residents, as well as the impact that the loss of a residential unit (and quite a large one, if is a 3 bed flat) on the supply of housing and the character of the area.

Impacts can include the comings and goings associated with the business use, where employees park, any big/regular deliveries and so on. Do client visit the premises? etc.

Also, check your lease. Share of freehold doesn't give any resident living in a leasehold flat the right to ignore the terms of the lease; he needs to apply for a letter license from the freehold company to do anything against the terms of the lease - which I suspect running a business is.

Who places your insurance? Is it put out to tender annually? Block insurance is usually administered by a broker, you'll get a bigger variety of quotes if you go through them as they can get insurances which aren't available to the public.