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Is That a "Residential Purpose"? Using Virginia Statutes and Municipal Ordinances to Clarify Restrictive Covenants on Non-Residential Uses

Almost invariably, a limitation on use of units or lots for “residential purposes only” is one of the first covenants found in governing documents.  But, where should one look to in determining what qualifies as permissible “residential purposes” when your association’s restrictive covenants say nothing more?  Virginia courts do not favor restrictions on the use of real property and construe restrictive covenants strictly, resolving substantial doubt or ambiguity in favor of the free use of property and against restrictions. [1]  Nevertheless, they have been willing to enforce covenants limiting the use of lots “for residential purposes.” [2]  The tricky part is understanding whether an owner is using the lot for a non-residential purpose.

Fortunately, an abundance of Virginia law provides supporting answers.  Virginia statutes, to which all common interest communities are subject and municipal ordinances of the city or county in which an association is located, may both apply, and either may supplement covenants by defining conduct that is non-residential or business usage of property.

The operation of a business from a residence is intuitively a non-residential use.  An owner that obtains a license, advertises or conducts business from a property is not using the property for “residential purposes only.” [3]  The definition of a business, under Virginia law, is a much lower threshold than most residents realize.  A person spending any regular amount of time, attention and labor to earn a livelihood or profit has a business. [4]  Issues associations frequently face, such as exterior storage of equipment, parking commercial vehicles, customers taking residents’ parking spots, and traffic increases during rush hours, are all characteristics of a business within an association.

In many cities and counties in Virginia, an association can also make use of local ordinances to better define a “business” or “non-residential” use of property and can, in some cases, take advantage of local government enforcement authority to prevent such non-residential use of lots.  An association’s liberal citation of city or county ordinances to enforce covenants or draft rules and regulations particularly about home businesses is highly recommended to prevent non-residential uses of the property and maintain the residential nature of the community.  It is a much less risky defense for an association to impose on its residents the same standards that the city or county in which an association lies does.  Each city or county in Virginia has these standards.  Below is a survey of them to give definition to the seemingly innocuous covenant limiting use of residences to residential purposes only.   

Stafford County

Stafford County, created in 1664, is home to the Aquia Creek sandstone used to construct the U.S Capitol and White House.  The sandstone quarry is now defunct and preserved as a County park, but the rest of the County thrives.   

Helpfully, Stafford County ordinances draw a distinction between home businesses and home occupations. [5]  Each of the three types of “home businesses” allow a different number of employees, customer visits, parking for customers, and storage of merchandise, equipment or materials. [6]   For associations, this is valuable because the ordinances makes clear the kind of conduct that constitutes a “business” use of the property.  Conversely, the definition of a “home occupation,” which allows no employees other than family members, no customer visits, no substantial increase in vehicular trip generation by the home occupation, requires that the property be used principally as a resident, and prohibits the storage of goods or merchandise for sale on the property, provides a clear picture of what constitutes “residential use” of a property. [7]  To be sure, these ordinances do not supplant an association’s covenants on home businesses or residential use, but supplement them well when those covenants lack sufficient detail.[8]

City of Fredericksburg

The City of Fredericksburg is the site of so much American history as a host of the colonial-era Presidents from Virginia, the drafting place of the Virginia Statue of Religious Freedom and of course the Civil War battle that bears its name.   The City has done well to preserve its fascinating history.  Ironically, not all history has been preserved in its original form - the City’s 100-year-old high school is now a condominium. [9]

For condominium residents “still in school” and other property residents, the City permits them to have certain home occupations in many of its zoning districts.[10] The ordinance only allows certain types of home occupations and only one non-resident employee is permitted and exterior signage and storage is prohibited.[11]  Customer parking is also restricted.  A resident may file an application with the City to have a home occupation, which limits parking to only the space or spaces on his or her lot shown on that application.[12]  The City will not interject itself into issues between associations and residents about customer parking, but the latter’s application to have a home occupation may be useful tool for an association to deter vehicles parked in spaces not shown on that application.[13]  An association can rely upon the home occupation limitations to bolster its prohibitions on non-residential uses of the lot.

Spotsylvania County

Spotsylvania County also has a rich history as the civil war was fought in the area not once, but twice.  Of much more recent vintage, these battle sites are contentious issues among preservationists and developers.  Laudably however it was a developer who saved the area of the Slaughter Farm Pen fight from subdivision.[14]      

On lots in the County’s subdivisions that have been dedicated, Spotsylvania differentiates between home businesses as either home enterprises or home occupations.[15]  This distinction for a home business operated in the County can either prohibit or restrict the number of employees, and quantity of signage, outside storage and parking the business may have.[16]  These restrictions change too based on the zoning district in which an association lies.[17]  The County readily defers control to an association’s covenant that is more restrictive than its own Ordinances.[18]  No County ordinance may be used to repeal a covenant, nor may a less restrictive covenant excuse an owner's failure to comply with a County Ordinance either.[19]

Henrico County

Henrico County is the successor of Henricus, Virginia’s second English settlement behind Jamestown.[20]  It too regulates home businesses.    

The County permits a home occupation to be operated from a dwelling unit provided the business is customary for one run from a home and the use is incidental to the residence.[21] The home occupation must be conducted by the resident(s) only, and clients may come by appointment only rather than be drawn from the general public.[22]  The ordinance also contains limitations on the area of the home that can be used for the home occupation and a prohibition on group activities and exterior displays of the occupation.[23]  The County clarifies its Ordinances are only minimal standards, which an association’s covenants can improve upon.[24] Accordingly Henrico associations are encouraged to adopt rules and regulations about home businesses rather than rely on the spare by comparison standards in the County’s Ordinances.

City of Richmond

Lawyers writing about the law in the City of Richmond cannot escape without a quip about its most famous lawyer, John Marshall, right?  Nope.[25]  Richmond, built on the James River fall line, i.e., the point ships can no longer traverse due to too shallow depths, deserves comment as many of its warehouses for cargo heading down the James have been converted into…condos.[26] 

In those condos, as well as every other residence in the city limits, Richmond regulates home occupations.[27]  Exterior storage of non-residential items is prohibited, and the hours a client or customer may park in a residential area is limited too.[28]  If a City Ordinance and association’s covenant differ, the more restrictive controls.[29]  To wit, the renovated Tobacco Row condominiums are more restricted now than the original warehouse buildings two centuries ago.  

Chesterfield County

Chesterfield County split from Henrico County in 1749.[30]  Coincidently, we are sure, Chesterfield’s Ordinances on home businesses are different and much more defined than Henrico’s Ordinances mentioned above.

Chesterfield County describes home businesses as either a “business from home” or “home occupation,” but the terms appear to be a distinction with no consequence.  Defined the same, they expressly exclude the operation from a residence businesses such as motor vehicle repair, tourist homes, kennels and beauty parlors.[31]  For home businesses the County permits, they are nonetheless prohibited from having employees other than residential family members, and storing business commodities or equipment outside.[32]  Home businesses may not have more than two clients at any one time, or more than one commercial vehicle at any time.[33] The County’s Ordinances cannot abolish any association’s covenants, and acknowledge that covenants may impose more restrictive standards than they can.[34]  With far less detailed Ordinances on home businesses, perhaps it’s time for Henrico to take a thing or two back from Chesterfield. 

City of Norfolk

It is difficult to pass on a comment about General MacArthur’s legacy on the City of Norfolk, but frankly discussing beer is more fun.  Anheuser-Busch built a plant in Norfolk in 1888.[35]  To those now living on the City’s riverfront in this once brewery, and now renovated condominium, cheers!

For those living there and all other residences in the city limits, Norfolk permits home occupations that are an accessory use of a dwelling unit.  Customers and employees in the residence are prohibited in most zoning districts but some districts allow an owner to obtain a Conditional Use Permit that allows them in limited circumstances.  Exterior signage, storage of materials and equipment, and certain business such as vehicle repair, are prohibited.[36] While the City will not enforce the standards of an association’s covenants, it does require covenants at a minimum to match the City’s Ordinances.[37]

City of Virginia Beach

The City of Virginia Beach lends itself to a comment about its history of pirates but anytime attorneys are writing about them there is an easy joke about there being a distinction of no consequence.  So the Knights’ Templar will do, whose early twentieth century club in the City is now…a condominium building.[38] 

For those residents and all others, Virginia Beach permits the operation of home occupations from dwelling units subject to several limitations.[39]  Increases in traffic, front yard parking and signage for home occupations are generally discouraged.[40]  Nuisances, and certain types of business such as auto repair and tourist homes, are prohibited too.[41]  The air of mystery surrounding the Knights’ Templar may still exist, but the air of mystery around home businesses in Virginia Beach condominiums, well not so much.    
  
State-wide Restrictions

The state also has restricted home businesses in ways that its cities and counties can only supplement, if not supplant.[42] Far be it from the state legislature however to compile its legislation on home businesses in any one Title of the sixty seven in the Virginia Code.  So here are those found do far. 

Virginia Code § 15.2-2291 (A) says eight individuals with mental illness, intellectual disability, or developmental disabilities residing together is residential.  Twenty-one short Titles later, Section 36-105.4 says occupancy standards restricting the maximum number of occupants to two persons per bedroom is presumed to be reasonable, and presumptively residential.  Nineteen Titles after that, Section 55.1-1821 does not permit home businesses to be prohibited by rules and regulations adopted by a property owners’ association but only by declaration.   Associations may restrict however the time, place, and manner that a home business is operated, the latter of which provides a basis for considering everything mentioned previously in this article.  And, as first mentioned, Section 58.1-3700.1, only three Titles later, defines the activity that constitutes a business.  So we strongly encourage boards to consult with legal counsel to balance the state and city or county authority available to it to supplement or enforce its association’s covenant limiting use of a lot or unit to residential use only.      

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Whiteford, Taylor and Preston’s Community Association attorneys have a Piedmont & Tidewater Committee who specialize representing associations including Marla Diaz in Richmond and Chad Rinard in Fredericksburg.  Ed O’Connell is a mentor to each.  Our friend, Kathleen Panagis, an attorney who represents associations in the Virginia Beach area, contributed to this article.  If you would like to discuss your association’s legal needs in any of these areas with us, please do not hesitate to call.