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legal differences of 'Project' or 'Commercial' studio

Discussion in 'Recording' started by garysun, May 26, 2007.

  1. garysun

    garysun Active Member

    I operate a project studio in a residential neighborhood.
    Can someone please explain the legal hows/is that makes it different than operating a commercial studio in a residential neighborhood?
    Thanks!
     
  2. MadMax

    MadMax Well-Known Member

    Your gear,





    your clients...





    and your income.



    Of course this is assuming that you are indeed operating as a legally registered business.
     
  3. MadTiger3000

    MadTiger3000 Active Member

    Where are you located?
     
  4. garysun

    garysun Active Member

    So what you are saying is that even a project studio that is accepting money in exchange for recording cannot operate legally in a residential neighborhood?

    Can you please clarify.
     
  5. sheet

    sheet Well-Known Member

    Actually, this has almost nothing to do with it.

    A bit of history. Back in the 80s, people in CA and other major music markets were building studios in their homes, in other places not necessarilly zoned for business, etc. They had the same gear, were attracting the same clientele, and doing more work in some cases than the legal commercial studios. NARAS and SPARS members went nuts. Here they were, paying to be in proper zoned areas, paying property/gear insurance, unemployment insurance, legals, taxes, etc, and the others were not. Of course there is a grey area here.

    You really have to check your local township laws. In my kneck of the woods, it is perfectly legal to operate a business in the home, as long as the home structure is what people see from the curb, as long as there is no excessive disturbance of the peace, the traffic flow in and out of the house does not bottle kneck the street, etc, etc. Every city and has their own list of rules and regulations.

    If you are operating as a legal business, operating within the bounds of the law in a proper zoned area, open to the public, that would be the only criteria.
     
  6. BobRogers

    BobRogers Well-Known Member

    I think the bottom line is that there is no legal definition of the term "project studio" or "commercial studio." As far as the law is concerned they any studio that takes money is just a businesses. If they operate in a residential area they have to obey different regulations than if they operate in a commercially zoned area. Sheet is using residential vs. commercial property to distinguish the term. Max is using the scale of the business. My guess is that Max's definition is the more common one.
     
  7. Thomas W. Bethel

    Thomas W. Bethel Well-Known Member

    Most cities are zoned (at least here in Ohio) there are residential zones and commercial zones and zones that are both residential and commercial. This is done so someone does not buy a parcel of land and setup a used car business in the middle of a residential area. A lot depends on the local city ordinances as to how a business can operate, Most cities have the same set of guide lines as sheet mentioned. You can operate a business out of your home as long as the following are adhered to in most places.

    1. You cannot have signage that would identify your house as anything other than a house (No neon signs, no large signs mounted to the building and no sandwich boards in the yard)

    2. To anyone casually walking down the street your "business" cannot be identified as anything other than a house. (i.e. no excessive traffic, no more than a few cars parked in the driveway, no loud noises or smells emanating from the premises, etc.)

    3. You cannot employ anyone who is not a direct family member. (some places have other laws gonerning the number of "employees" you can have.

    4. Your "business" cannot be the repair of cars, the tanning of leather, the manufacturing of any goods that requires exotic chemicals or potentially explosive materials and everything you do has to be carried out within the structure(s) located within the property lines. ( I guess that means that you could not use your yard for an assembly area or storage)

    What this means that a Doctor or lawyer or insurance salesmen could use their house for seeing clients and patients but no "operations" could be preformed due to the use of potentially dangerous gases for anesthesia. You could also be manufacturing jewelry or small handmade items with a sewing machine or operate a simple assembly or engraving operation.

    When it comes to other professions and other uses the laws (at least in Ohio) do not specifically forbid them or authorize them but a recording studio may push the limits on noise and or excessive traffic.

    The best thing to do is go to your local city hall and request the current laws on owning and operating a home business. If you have trouble understanding these laws you should consult a local lawyer. It would also probably be a good idea to discuss this with your closest neighbors so that there is no misunderstandings and that they KNOW you are going to be running a recording studio but everything, including the noise, will be self contained. Many people may feel that recording studios generate a lot of noise and that people maybe using drugs on the premises so you should be ready to discuss this with them.

    Best of luck! and let us know how it turns out.
     
  8. sheet

    sheet Well-Known Member

    Maybe I should clarify. I am comparing commercial studios and home based studios that are open for public bookings. These studios would be in direct unfair competition with one another.

    There are commercial studios that are world class, make no money, have little traffic, etc. There are commercial studios that are not really open to the public, because they are locked out by a producer, engineer, label, etc. There are "project" studios of every caliber that make money because they are tools for their producer, engineer, artist owners. There are project studios that don't make money and are for private use only.

    So, really, the OP needs to clarify what the two studios do and why. But he did say LEGAL differences. Gear, clientele and income have nothing to do with it. It is a matter of having a license to operate in a properly zoned location, incorporated as a business, paying insurance on your facility and gear (I wonder how many don't check to make sure that their homeowners insurance covers business equipment in their home?), employee unemployment, health insurance (if any), taxes, the financial resources and credit to secure a lease, etc, etc.
     
  9. Thomas W. Bethel

    Thomas W. Bethel Well-Known Member

    If you are making money and are doing it legally then you can call yourself a commercial facility run by a professional. If you are running a business in a residents and you are not "legal" for your town or city then you could still call yourself a commercial facility but you could get into some legal hassles from the local municipality. Today the lines that differentiates a "project studio" from a "commercial studio" have been blurred. You no longer need a large operation with millions of dollars of equipment to turn out commercial quality material. If you are making money from providing services you can call yourself a professional. If most of what you do is work on people's projects then I guess you are a "project studio" but if you are charging for your services then I guess you could also call your self a commercial studio.

    In what context are you asking about this? From a legal or ethical one?
     
  10. garysun

    garysun Active Member

    This is all really helpful I can't thank you enough.

    From what legal jargon I can make out from reading my town code I think Sheet is right, though the certified letter from the town said otherwise.
    Has anyone heard stories of a town coming down on a residents studio?

    Here's what my town code says on the issue:

    HOME OCCUPATION — A profession or other occupation which is conducted as an accessory use on a residential lot by one or more members of the family residing on the premises, and which conforms to the following additional restrictions:
    A. The profession or other occupation shall be carried on wholly within a permitted building.
    B. Not more than 50% of the ground floor area of the principal building or its equivalent elsewhere shall be so used.
    C. There shall be no exterior display or exterior sign except as permitted in the Index of Use Requirements for the appropriate district, no exterior storage of materials or equipment, and no other exterior indication of such home occupation or variation from the residential character of the principal building.
    D. Not more than two persons other than members of the family shall be occupied in connection with such home occupation at the same time.
     
  11. MadMax

    MadMax Well-Known Member

    That's the real context of my original comment.

    Historically, PART of what used to separate project studios from "commercial" studios was the quality of the gear...

    Part was the level of income...

    Part was the client base...

    Part was the physical location...

    As has been pointed out, the lines have been blurred.

    IMHO, it's really whether you are operating as a registered legal entity or not... and still based partially on the historical "definition".

    There are quite a few full-time professional operations that do "commercial" level work that are home based... soundscape designers come to mind. Also, there are quite a few commercial operations that do work for the gaming industry that are home based... they primarily do file exchanges through ftp servers.

    This isn't really as cut and dried as it used to be... and whether you call yourself a project studio or a commercial studio CAN be a matter of opinion or attitude.

    I'll say it's akin to the comment by either a senator or a Supreme Court Judge (Can't remember which it was...) when he said, "I can't define pornography, but I know it when I see it."
     
  12. garysun

    garysun Active Member

    I do have a dba and am operating my business legally.
    The only snag is that I'm doing it in a residential neighborhood out of my humble home studio.

    One neighbor has taken aim at this and has gotten the law involved, so I'm just looking to find out my rights, and if there are any legal loopholes if what I'm doing is illegal.

    How do many others with commercial or project home studios get away with earning a living from their home?
     
  13. TVPostSound

    TVPostSound Guest

    A DBA does not legalize a business, nor is it a business license.

    A DBA is only required by a bank so you could deposit, and cash checks written to the name you gave your business.
     
  14. Thomas W. Bethel

    Thomas W. Bethel Well-Known Member

    When I started in to my mastering business, which is home based, I went to each of my six neighbors and told them that I was going to be using my house for a home based business. I told them that it would be a mastering facility and a video post production business and and that there would be NO live/loud music and one or two cars (at most) in my front driveway. I asked them if they had any concerns and if they did they should voice them. None of them raised any real concerns.

    I also went to the city and talked to them and found out what the city ordinances had to say about home based businesses. I asked them to be upfront with any concerns that they had and they asked a lot of questions and I was able to answer them all. They certified that what I was proposing was within the current guidelines.

    I went ahead with the business planning and construction. That was almost 12 years ago and so far I have had no real problems although I do have a neighbor that makes quite a bit of noise doing his gardening chores with power equipment but he has, for the most part, been OK. Recently that same neighbor raised some concerns with the city over my business but I had all my ducks in order and he really could not get the city to do anything other than write a letter of concern to me which I answered to their satisfaction.

    I know of a lot of horror stories mostly with people trying to start up a recording studio in a residential neighborhood and the people around the studio raising questions and/or objections over the perceived or imagined noise problem or raising concerns over drug or alcohol use or the late night traffic on the street with musicians and others coming and going at all hours of the night.

    It seems like the higher the prices for homes in a neighborhood the more problems one has.

    I would find out what your neighbor is upset about and find a solution to the problem. If it is a general concern see what you can do to calm his or her fears. Sometimes people get upset when there is really nothing to get upset about because they don't have all the facts.

    (A lot of people still equate musicians/recording studios with with the excessive use of drugs and alcohol and also assume the musicians will play loud music in their cars when coming and going and tend to party excessively during the recording sessions which maybe what your neighbor is afraid of. There are also peiople who don't like a lot of the lyrics in current songs and maybe upset that you are doing the "devil's work")

    Most times these types of complaints are handled by the police to start with and then the city may provide an arbitration committee or an ombudsman for obth of you to come foward and speak your piece and if all else fails your neighbor may decide to sue you which would be handled in a civil court with both of you having to have legal representatives and a judge to rule on the matter.

    If you can try and head this off before you have to go to trial and if talking to your neighbor does not produce good results try and see if there is a community service person on the city's payroll who can mediate the dispute to the satisfaction of both parties.

    Best of luck!
     
  15. MadMax

    MadMax Well-Known Member

    Gary,

    Not slingin' poo here, but this would have been a lot easier to answer with this info...

    My first and best suggestion is... GET A LAWYER!!

    You're legally entitled to operate a business, true... BUT... the truth is that you MAY fall under having to comply with local and/or municipal and/or county caveat's and ordinances.

    You may be in violation of some noise, traffic or similar ordinance... or you may not. You'll be best served by contacting an attorney familiar with the law in your location.

    As far as how other small studio operations do business in residential environments... well... as many variables as there are... it can be ad infinitum... well built (soundproofing) studios, good neighbors, large lots, ordinances, etc... make a list and pick any of em'...

    On the flip-side... take the same list and flip it the other way... just as anything (in combination) can make a studio... can break a studio.

    What's your neighbor's big beef?!? If you can determine that, then you might have a chance to address it before it's gets beyond silly... if it hasn't already... but get a lawyer first!
     
  16. BobRogers

    BobRogers Well-Known Member

    Gary, I'm with Max. Get a lawyer. A good one who is well thought of locally. You've made a start on educating yourself on the town ordinances, and you want to make it clear to everyone that you have every intention of complying with all laws. You also want to stay on friendly term with your neighbors as much as possible. It sounds like you have a letter from someone in the town government. Take it to the lawyer and see if it holds water.

    Another thought: time to find someone who knows local politics and law enforcement and pick his or her brain and get to know how things really work in your area. I'm not suggesting anything sinister. Just that, for instance, in any organization there are figureheads and people who do the real work. You need to start learning some of this stuff so you can talk to the people who really know what is going on. The local Small Business Administration may be a good place to start if it is run by someone good.
     
  17. MadTiger3000

    MadTiger3000 Active Member

    This is in my area, so I have to interject:

    In some areas, and in some situations, a d/b/a does legalize a business.
     
  18. MadMax

    MadMax Well-Known Member

    Bob, that's an EXCELLENT idea! By getting to know "town politics", you end up not having to fight "city hall" as it were. Well... maybe not as hard or as bad as someone who's just coming in for the battle.

    As in my case... I had a neighbor who "fought" me on putting in my septic system. Sure, it delayed me by a year, but I went about things gently and slowly. It cost me an extra $100, but in the end, the county is backing me 100% on the septic system. They understand that not only are my intentions are to be on the side of the law, but I'm also wanting to be a good community citizen both on a personal, but also on a business level.

    I'm finding far easier to comply with the county authorities than to try to get away with anything. (It's actually been kind of blowing their minds!)

    That's not to say that I'm not going to have any issues, but when I do, I expect them to be a bit more lenient with their decisions.

    Again, the first thing I did was check out what my local ordinances were. Then I talked to my neighbors (Like Thomas did). Then I set out to talk to the "authorities" to find out their reaction to a studio being in the community. Because I went about asking, as opposed to just announcing, I've been met with a lot of positive attitudes.

    I guess you might say I'm suckin' up... but it's truer than you can imagine that honey works far better than vinegar!
     
  19. garysun

    garysun Active Member

    That is definitely my next step, talking to the local authorities.
    I'm just a little nervous that I may admit something that would put my livelihood in jeopardy.
    Any advice on what I should and shouldn't say?
     
  20. MadMax

    MadMax Well-Known Member

    I'd say start off by asking questions more than worrying about what you should or shouldn't say.

    I mean, if you are doing things on the up and up, you've got nothing to worry about.

    I guess "we" should start out by asking you a few questions, that you may very well be asked by the local authorities...

    Primarily... what's the nature of your neighbor's beef?
    Does your business have/need a local business license?
    Do you have/need a state sales tax filing requirement?
    (These are what establishes your legit business entity)

    Did (or do) you have the appropriate building permits and inspections for any construction for your studio?

    Have you been cited as being in violation of noise, traffic or other covenants? (Ticket, fine, etc...)

    I'm not asking you to answer these... I'm just guessing that these are some of the question's you're liable to be asked.
     

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