For most people, the largest element in a monthly budget is often the cost of housing. 

Whether you rent or own, the payments you owe for the real estate you occupy can stretch your budget. And the cost of living can be doubly expensive if you also rent or lease a commercial space for your business. 

That’s why if you’ve ever owned or rented a commercial property in the past – or dream of building your own company in the future – one question has probably crossed your mind: “Can I live in my commercial space?” 

It’s an enticing idea. Life is expensive after all, and living at your place of business would theoretically save you thousands in residential rent every year. Why not free up your cash to be put to work in other ways? 

The thing is, not many people are sure if it is legal, or if their landlord would allow it.

Is it Legal to Live in Your Commercial Property?

The answer is: it depends on how the property is zoned, and on the specifics of your particular situation.

However, no matter where you live or who your landlord is, all properties are subject to zoning laws. And while every city, town, municipality, province, or state may have slightly different zoning laws, they all work effectively the same way.

How Do Zoning Laws Work?

Zoning is a facet of urban planning, and involves the government dividing up parcels of land into different zones. Each zone has its own set of rules and regulations that govern any kind of new development. Essentially, the purpose of zoning helps guide community growth and development. 

Zoning helps communities manage the size, shape and location of buildings within an area, and governs what type of activities can take place in those buildings. Zoning also prevents any new developments from interfering with the “character” of existing neighborhoods. Zoning laws would likely always prohibit the construction of a new steel manufacturing plant in the middle of a quiet residential suburb, for example.

The most common zoning types include:

  • Residential
  • Commercial
  • Industrial
  • Agricultural
  • Rural
  • Historic 
  • Combination (e.g. commercial / residential)

These regulations can sometimes make it difficult to set yourself up with a live/work situation at your commercial property. However, it is not impossible to live in work spaces, and if your zone is designated as some form of mixed use space, then it’s possible to treat your commercial lease as some form of apartment – provided the landlord is also ok with it. 

How to Live in a Commercial Space?

In places with relaxed zoning laws, your ability to live and work in a commercial building will often depend on the rules set up by your landlord, who will lay down their own set of rules. Often these rules will be made clear in the lease. You’ll know fairly early on in the process if it’s possible or not. 

If you sign a commercial lease in Ottawa, Ontario, for example, you’re considered a commercial tenant. As such, you are governed by Ontario’s Commercial Tenancies Act, which generally provides fewer rights than a residential tenant would have. 

However, even if local zoning laws consider the premises commercial, a tenant may still be considered a residential tenant if the premises are mainly used as a home. The best way to avoid legal trouble is to be upfront about what the possibilities are when touring prospective commercial properties to rent. 

What Happens if I Get Caught Trying to Create a Live / Work Situation at Leased Commercial Real Estate?

Any tenant that breaches the terms of their lease may end up being evicted from the building. Additionally, if the breach in the contract is illegal, the tenant could be fined and may be pursued legally by their landlord. The best advice is usually to find out exactly how your location is zoned, speak to your landlord, and get advice from someone that is an expert in this area. 

While the financial incentive to carve out a little personal living area in your place of work may be tempting, it’s usually not worth it over the long run. Imagine if you accidentally started a fire, or if your washing machine experienced a malfunction and you flooded part of the building. Do you think the insurance company would be happy to pay for the repairs, no questions asked? 

You might end up with a huge financial liability if you damage the property. Ultimately, if you rent or lease commercial real estate – whether it is an office, a workshop, or an industrial building – it’s best not to try to outsmart the law, and stick to the use the property was designed for.