Can I Run a Business From My Apartment? Lease and Zoning Rules

Is it illegal to run a small business from an apartment?

It depends on what you do and where you do it. Los Angeles, San Diego, and New York City allow home occupations within limits, so in those cities a small home business is not illegal by itself. A problem comes up when the activity goes past the city’s limits or past what your lease allows.

A zoning problem is a matter with the city. A lease problem is a matter with your landlord. You can have one without the other.

In New York City, a zoning violation can reach your landlord. A Department of City Planning fact sheet says “DOB can issue zoning violations to a building owner where a home occupation is violating the zoning, including fines and potentially shut down the business.” DOB is the city’s Department of Buildings.

What follows a lease breach depends on your lease and your state’s landlord and tenant law. If your landlord raises a concern, read the default section of the lease, and ask a local attorney or tenant help office.

Start with your lease and your landlord

City permission does not change your lease. The same New York City fact sheet says “Any building has the right to further restrict home businesses as a condition of leases or condo/co-op rules.”

Lease wording differs, so read your own copy. Check for wording on business use, commercial activity, and who may use the apartment. Check for rules on visitors, deliveries, noise, signs, and hallways or lobbies. Check also for house rules that are part of the lease, and for any renters insurance requirement.

Ask about insurance at the same time. The SBA says a rider added to homeowner’s insurance “can offer protection for a small amount of business equipment and liability coverage for third-party injuries.” That sentence is about homeowners. If you rent, ask your renters insurance company in writing whether your policy covers business equipment, inventory, and a client who gets hurt in the apartment.

When you talk to your landlord, keep the request short and cover the points in the list below. Ask for the answer in writing, and keep a copy with your lease. If the lease needs a change, ask your landlord how to record the change.

• What the business does, in one sentence.
• Who comes to the apartment, if anyone, and how often.
• What gets delivered or stored there.
• Whether anyone outside your household will work there.
• Whether you plan to put the apartment address on a license or a public filing.

What do city home occupation rules say?

Home occupation rules are local. The table below shows the limits in three cities. These limits apply only in these cities, so look up your own city’s code.

The home occupation definition in Section 12-10 of New York City’s Zoning Resolution was last amended on June 6, 2024. If an older article says 25 percent or 500 square feet, it describes the earlier limit. The city’s planning fact sheet, written while the change was still a proposal, lists “25% of the home, or 500 square feet” as the rule before the change. Other sections set different numbers for some districts, so check your own address.

Cities in one state can differ too. San Diego’s indoor storage limit is 1,000 cubic feet, and Long Beach’s form says total storage “shall not exceed one hundred twenty-eight (128) cubic feet.” San Diego’s code also lets an applicant deviate from its employee, customer, vendor, and vehicle limits by obtaining a Neighborhood Use Permit.

State law can limit what cities can do. Florida’s statute, Section 559.955, says a qualifying home-based business “May operate in an area zoned for residential use.” One condition is that workers at the home live there, “except that up to a total of two employees or independent contractors who do not reside at the residential dwelling may work at the business.” Another is that the activities are “secondary to the property’s use as a residential dwelling.” The statute does not mention leases, so read your lease as well. The statute also says it does not supersede condominium, cooperative, or homeowners association documents.

What should you check for your type of business?

City rules look at what happens in the apartment. The table below shows what to check for five kinds of activity. Your own city may differ from the examples.

Can you write off your apartment as a business expense?

You can write off only the business part, and only if you meet the IRS tests. IRS Publication 587 says “home” includes an apartment. The publication also says “If you rent the home you occupy and meet the requirements for business use of the home, you can deduct part of the rent you pay.” To figure your deduction, you “multiply your rent payments by the percentage of your home used for business.”

Two tests come first. Under the exclusive use test, “you must use a specific area of your home only for your trade or business.” In the IRS example, a den the family also uses for recreation fails this test. Under the regular use test, “Incidental or occasional business use is not regular use.” The space must also fit a listed use, such as your principal place of business or a place where you meet clients in the normal course of business.

Storing inventory can skip the exclusive use test, but it has five tests of its own. One is “Your home is the only fixed location of your trade or business.” In most cases, the simplified method multiplies $5 by the area used for business, and that area is limited to 300 square feet. Publication 587 says “The rules in this publication apply to individuals,” so if your LLC files its own return, ask a tax professional.

What do license forms and LLC filings ask about your address?

A home business can still need local paperwork, and the form may ask about your home. Our guides to the Long Beach license address lines and the Irvine license and home occupation rules go through two of these forms line by line.

Renters should read these forms closely. Long Beach’s home occupation form says approval “shall be void when that person moves from the dwelling unit or discontinues the business.” The City of Tampa’s home occupation affidavit asks for the “Property Owner’s Name,” and its agent section says “Both owner and agent must sign and have their names notarized.” If you rent, ask the city who needs to sign.

LLC filings ask for addresses too. California’s Form LLC-12 asks for a street address for the principal office, a mailing address, and a “business or residential address” for each manager, or each member if there is no manager. The instructions say the agent’s name and street address are “a public record, open to all (as are all the addresses of the LLC provided in filings).” So an apartment address on that form becomes public. Our guide to keeping a home address private compares the address lines. A sole proprietor has no formation filing, and our sole proprietor address guide explains which records become public.

City records can be public too. Los Angeles publishes a “Listing of Active Businesses” dataset with columns for street address and mailing address. Some cities also limit where your home address appears. Long Beach’s form says “No advertisement shall be placed in any media containing the address of the property.” San Diego’s code says “Other advertising shall not include the address of the premises.” If your city has a rule like these, ask how it applies to your website and online listings.

You may want a separate place to receive general business mail. Our Silicon Valley and Los Angeles pages describe the business addresses save office offers. A separate mailing address does not change your lease, your zoning limits, or what you may do in the apartment. Each license form and LLC filing also sets its own address rules, so read each line before you enter an address. Those limits apply to any address, including ours.