If I have a “single family” dwelling with a mother-in-law suite attached, is it legal for me to live in the suite and rent out the rest of the house to a small family?

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If I have a “single family” dwelling with a mother-in-law suite attached, is it legal for me to live in the suite and rent out the rest of the house to a small family?

My concern is, will my homeowner’s insurance cover this situation? If not, is there some way to fix this situation so I could live in my home and rent it out at the same time? For example, if I lived in the main part of the house, could I rent out the mother-in-law suite to a boarder? I am also a little concerned about zoning law, but my main concern is home insurance. I have 2 duplex units down the street and I don’t live in a neighborhood that has HOA associations or covenants.

Asked on January 4, 2013 under Real Estate Law, South Carolina

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

As a general matter, it is legal to live in part of your home and rent out other parts. You do have to comply with your local zoning law and also make sure your rental is properly registered with your municipality--contact your town or city clerk's office and/or building department to inquire into this.

As to insurance: regular homeowner's insurance will NOT cover a rental. Homeowner's insurance covers when the insured resides in the home and does not rent out part or all of it. You need insurance specifically for rental units. Your insurer or insurance agent/broker can guide you in getting the correct insurance. Note that if you do not get the proper insurance and have some loss or damage, your insurer may deny the claim because you would have committed a material (important) misrepresentation by having regular homeowner's insurance and not notifying the insurer of the rental or seeking (and paying for) appropriate coverage.


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