How to check property deeds, mortgage, and insurance terms

Before you start trading from home, you must check that your mortgage, insurance, and property deeds allow it. Running a business without the right permissions can breach the terms of your agreements and even invalidate your home insurance, so it’s vital to review your documents and speak to your providers first.

Why This Check is Crucial

Most residential mortgages and home insurance policies are designed for purely domestic use. Using your home for business purposes, even if it’s just office work, changes the risk. The main concerns for providers are:

• Insurance Risks: Will you have business visitors? Are you storing stock or valuable equipment? Standard home insurance won’t cover these, and a fire or theft related to your business could lead to a rejected claim.
• Mortgage Conditions: Lenders want to ensure the property remains primarily a home. Some may have clauses restricting business use to protect the property's value and character.
• Property Deeds: Some properties, particularly on newer estates or in former council houses, have legal restrictions called 'restrictive covenants' in their deeds that can forbid commercial activities.

A Step-by-Step Guide to Checking Your Documents

1. Gather Your Paperwork: Find the latest copies of your mortgage agreement, your home insurance policy schedule and wording, and the title deeds for your property (you can get a copy from the Land Registry for a small fee if you can’t find them).

2. Review Your Mortgage Agreement: Look for clauses relating to the use of the property. Search for terms like "business use," "commercial activity," or "trade or profession." If you find any restrictions, call your lender’s customer service line. Explain the nature of your business – for most low-impact businesses (like freelance writing or consultancy from a home office), they are often happy to provide written consent.

3. Check Your Home Insurance Policy: This is the most important check for many home businesses. Your policy document will have a section on "what is not covered" or "exclusions." It will almost certainly exclude liability and contents related to business activities. You must contact your insurer. You may need to add an extension to your policy or take out a separate, specialist business insurance policy.

4. Examine Your Property Deeds: Look for any "restrictive covenants." These will be clearly listed. If you see a clause like "not to be used for any trade or business," you may need to seek permission or legal advice. However, these are often historic and may not be enforced for a quiet, home-office business that doesn’t disturb neighbours.

Top Tip: When you speak to your providers, be clear and honest about your business. Differentiate between a simple home office, having customers visit, and storing stock. The type of business makes a big difference to their decision. Always ask for any permission or changes to your policy to be confirmed in writing.