Check the Zoning Regulations Before Operating a Business Out of Your Home!

Modern technology and our ever-changing economy   are causing more people to consider starting up or basing their existing businesses from home.  Many communities have embraced this concept and have enacted zoning regulations that make it easier to do just that.  Some jurisdictions, however, still have regulations on their books that make operating a business from home a real challenge.  Regardless of where your community falls on this spectrum, it is important to know what the rules are before you start operating a business from your residence.  If you live in a community without any zoning regulations you can do just about anything you want to on your property but it is advisable to check to make sure there are no recorded restrictive covenants that limit or prohibit non-residential or commercial activities in the subdivision.  Assuming that there are zoning laws that apply to the property, or if you are uncertain whether your area is subject to zoning, the first step is to call the local government.  There are many different names for the division of government that may regulate such matters, such as building inspection, codes and permits, or the zoning office, but if you call the general city or county  number and explain what  you need to know, they will direct you to the right place.

Some communities allow home offices and home occupations, but limit the types of uses, square footage  of the non-residential use within the house, prohibit the use of accessory buildings for this purpose or limit employees to those who reside in the house. In some communities home occupations and home offices are permitted by right, but in others, such uses are allowed only as a conditional use that must be approved by the local board of adjustment after a public hearing, including notice to adjoining property owners.    There is also wide variety as to which uses are allowed as home occupations or home offices.  For example in some communities,   artists, music teachers and upholsterers  may  sell  their services or products  from  their residences, but  beauticians, yoga instructors   or caterers  may not.   Further, the type of home occupation permitted in a community can vary by the zone in which the property is located.  For example, in some places persons who live in a residence in an agricultural zone are permitted to engage in a wider range of home business activities than those in residential zones.

If you live in an area that allows home occupations as a conditional use, and your business activity fits within what is permitted by the regulations, you will need to complete and file an application that must be approved before you can start your home business. .   It is always a good idea to contact your neighbors prior to the hearing to inform them of your proposed activities.  It is always better to answer their questions or address their concerns before the public hearing. Boards of adjustment have the discretion to impose conditions on the operation of the use, and can deny the permit if the evidence shows that the use could be disruptive or out of character with the area.  Reaching out to the neighbors will go far in obtaining a favorable outcome.

If you live in a community that does not allow the proposed use in your home, do not despair.  Many local jurisdictions are coming around to the modern reality that business needs are changing. To retain and attract new residents they must move with the times and enact regulations that are more accommodating to the current economic environment.  The way to change the law is to talk to the local planning office and elected officials about enacting a zoning ordinance text amendment that would allow more flexibility in operating businesses from the home.

In addition to obtaining local zoning permits, many home-based businesses are subject to state or local health department regulations.  Child care operators, caterers, and bed and breakfast establishments, among other businesses,   must also comply with other applicable regulations.


Christine Neal Westover is an attorney in the Lexington office of McBrayer . Ms. Westover has extensive experience practicing law in both the public and the private sector. The focus of Ms. Westover’s experience and area of practice is land use law since her assignment in 1991 as legal advisor to the boards, commissions and divisions of government within Lexington Fayette County on all matters related to planning, zoning and land use law. Ms. Westover has an extremely deep and broad expertise of the laws governing land use in Kentucky and the procedural and substantive complexities that underpin planning and zoning matters. She also has significant experience dealing with governmental divisions such as Building Inspection, Code Enforcement and other administrative bodies due to their regulatory authority in land use matters. Ms. Westover can be reached at or (859) 231-8780, ext. 137.

This article is intended as a summary of  federal and state law and does not constitute legal advice.


A New Beginning for Closings

Currently, under federal law, within three business days after receiving an application, mortgage lenders must deliver two different disclosures to the applicants: an early Truth in Lending Statement and a Good Faith Estimate. At closing, two more disclosures are required: a final Truth in Lending Statement and a HUD-1 settlement statement. Starting Aug. 1, 2015, that long-established process will change. The forms will be reduced to two and simplified so that consumers will be able to mortgage shop more easily and understand their mortgage terms and costs more thoroughly.

The mortgage crisis that began in 2008 was precipitated by many consumers taking on loans they could not afford. Though the industry has rebounded from the crisis, the dire situation highlighted the need for consumers to better understand the true costs and risks of a mortgage. Under the Dodd-Frank Act, the Consumer Financial Protection Bureau (CFPB) received the power to create new rules for the Real Estate Settlement Procedures Act (RESPA) and for most of the Truth in Lending Act (TILA), which are the laws that require the existing disclosure forms. After two years of research and testing, the CFPB decided that the simplified, so-called “Know Before You Owe” mortgage forms are the best way to educate consumers.

Beginning in August 2015, consumers will be provided with The Loan Estimate form  within three days after submitting a loan application. It replaces the first Truth in Lending statement (long-considered ironically named for the confusion and lack of clarity it gave to consumers) and the Good Faith Estimate. Consumers can use this form to compare costs and features of various loan options. Three business days before the loan closing, consumers will receive a Closing Disclosure. This replaces the final Truth in Lending statement and HUD-1 settlement statement. For the first time, consumers can review the final loan terms and costs before they take a seat at the loan closing table.

This upcoming change is just a part of CFPB’s initiative to reform the mortgage markets. Hopefully, consumers will not be the only ones to benefit from the future modifications. Lenders and real estate attorneys should be optimistic about the potential to cut down on administrative costs and lessen the “surprises” that can ruin a closing. Those in the mortgage industry should review the forms carefully and take necessary implementation steps in the year ahead.


Christopher A. Richardson is an associate at McBrayer, McGinnis, Leslie & Kirkland, PLLC in the Louisville, KY office. Mr. Richardson concentrates primarily in real estate, where he is experienced in residential and commercial closing transactions, landlord/tenant relations, and mortgage lien enforcement/foreclosure. Mr. Richardson has closed innumerable secondary market and portfolio residential real estate transactions and his commercial practice ranges from short-term collateralized financing and construction lending to development revolving lines of credit. He can be reached at 502-327-5400 or

This article is intended as a summary of  federal and state law and does not constitute legal advice.

Buying a Home? Do This First!

Potential home buyers can spend years saving for a down payment, months creating a budget, and weeks looking at properties before making the plunge. Too often, though, they overlook a crucial step on the path to purchase: checking their own credit report and credit score. Your credit report and credit score could be the keys to unlocking that white picket fence to your new home. Let’s take a look at why this is so important.

The Credit Report

A report is the laundry list of your credit history. Credit cards, student loans, car payments, past mortgages, etc. are all detailed, along with whether you are in good standing for each of the accounts. Reports reveal who is examining your credit report (such as lenders) and contain some personal information (such as employment history and bankruptcy filings).

There are three credit-reporting bureaus: TransUnion, Equifax, and Experian. Each of these bureaus issue separate credit reports for individuals. They also issue a unique credit score.

The Credit Score

Rather than sifting through lengthy credit reports to assess lending risks, financial institutions make loan decisions based on, in part, one’s credit score (often called the FICO score). The scores are meant to signal how well a consumer will handle future credit. The  majority of mortgage lenders use FICO as the means to determine the type of loans buyers qualify for and the appropriate interest rates.

Consumers are often frustrated with the fact that there is no exact formula for determining a score. Each bureau creates its own, taking into account a variety of factors, including, but not limited to, the length of credit history, type of accounts, payment history, and the ratio of debt to credit limit. Even the score range is not uniform, though the scale is generally between 300 and 850.

What is a “good” credit score for homebuyers? Well, that can be hard to generalize, but to obtain an FHA loan (one of the most common for first-time buyers), a credit score of 620 or above is preferable. Those with a score over 720 are considered to have excellent credit.

Why Should I Check It?

Reports and scores are not free from error. Unfortunately, many of them are subject to it. A 2013 Federal Trade Commission report found that 20% of consumers have errors on their credit reports, and for 5% of consumers those errors are enough to affect their credit scores. With these statistics in mind, it is an absolute must that potential homebuyers check theirs for accuracy.

Individuals are entitled to one free credit report each year from each of the three bureaus. These reports can be obtained all at once or at different intervals. To get your free copy, visit or call 1-877-322-8228. In addition, can provide scores, but be wary of any fees that may apply. Review the information carefully and dispute any mistakes in writing. Under the Fair Credit Reporting Act, both the credit reporting company and the information provider (that is, the person, company, or organization that provides information about you to a credit reporting company) are responsible for correcting inaccurate or incomplete information in your report.

Fixing inaccuracies can be a lengthy process; this is why reports and scores should be reviewed well in advance of trying to secure funding for a home. Don’t let three digits stand between you and your home-buying dream. If you would like more information or have discovered an error and need help in correcting it, contact the real estate attorneys at McBrayer.

For more information on how credit scores can affect a mortgage, please view the Understanding Mortgage Credit Scores guide from Zillow.

J. Markham


Joshua J. Markham is a member at McBrayer, McGinnis, Leslie & Kirkland, PLLC in the Lexington, KY office. Mr. Markham practices in virtually every aspect of real estate law, including title examination, title insurance, clearing title issues, deeds, settlement statements, preparation of loan documentation, contract negotiation and preparation, lease negotiation and preparation, and any and all other needs related to residential and commercial real estate matters.He can be reached at or (859) 231-8780, ext. 149.

This article is intended as a summary of  federal and state law and does not constitute legal advice.




One Day Left to Share Your Comments about the Closing Process!

On January 3, the Consumer Financial Protection Bureau (“CFPB”) issued a notice and request for information in the Federal Register regarding the real estate closing process. Specifically, the CFPB is interested in knowing the consumer “pain points” associated with mortgage closing and how those pain points might be addressed by market innovations and technology.

The bureau wants input from consumers, mortgage lenders, housing attorneys, settlement closing agents, real estate agents, fair lending and consumer advocates – basically anyone and everyone with closing experience. This is your chance to share your perspective, whether good or bad, and help the closing process to be a smoother and more consumer friendly one for your future purchase, sale or refinance. The information collected during the comment period will be used to help the CFPB come up with future improvement initiatives. This is part of the larger “Know Before You Owe” project, which is intended to help consumers understand and navigate the home-buying process.

The CFPB has made it easy to share information by listing seventeen specific questions they would like responses to, including:

1. What are common problems or issues consumers face at closing? What parts of the closing process do consumers find confusing or overwhelming?

2. Are there specific parts of the closing process that borrowers find particularly helpful?

3. What do consumers remember about closing as related to the overall mortgage/home-buying process? What do consumers remember about closing?

4. How long does the closing process usually take? Do borrowers feel that the time at the closing table was an appropriate amount of time? Is it too long? Too short? Just right?

5. How empowered do consumers seem to feel at closing? Did they come to closing with questions? Did they review the forms beforehand? Did they know that they can request their documents in advance? Did they negotiate?

6. What, if anything, have you found helps consumers understand the terms of the loan?

7. What are some common errors you have seen at closing? How are these errors detected, if at all? Tell us about errors that were detected after closing.

8. What changes, diverging from what was originally presented at closing, often surprise consumers at closing? How do consumers react to changes at closing?

9. How, if at all, do consumers typically seek advice during closing? In person? By phone? Online?

10. Where and to whom do consumers turn for advice during closing? Whom do they typically trust?

11. What documents do borrowers usually remember seeing? What documents they remember signing?

12. What documents do consumers find particularly confusing?

13. What resources do borrowers use to define unfamiliar terms of the loan?

14. What, if anything, would you change about the closing process to make it a better experience for consumers?

15. What questions should consumers ask at closing? What are the most important pieces of information/documents for them to review?

16. What is the single most important question a consumer should ask at closing?

17. What is the single most important thing a consumer should do before coming to the closing table?

You can submit answers to these questions, along with your own additional comments, online by visiting this webpage: But time is of the essence! The comment period closes tomorrow, February 7th. Hurry and let your opinions be known!


 Brittany C. MacGregor is an associate attorney practicing in the Lexington office of McBrayer, McGinnis, Leslie & Kirkland, PLLC. She is a graduate of Transylvania University and the University of Kentucky College of Law. Ms. MacGregor’s practice focuses on real estate law, including title examination, title insurance, clearing title issues, deeds, settlement statements, preparation of loan documentation, contract negotiation and preparation, and lease negotiation and preparation. She may be reached at or at (859) 231-8780.