Tenant Wants to Sell Sourdough From Rental—Should I Allow It?

Question

Hey everyone, looking for some guidance from landlords who have dealt with home-based businesses in rentals.

I own a duplex in Alaska. One of my tenants told me she has started making sourdough and wants to sell it as a small home-based business out of her unit. This would be done in a normal residential kitchen — no commercial appliances.

I’m trying to figure out whether I should allow this or not, and I’d like to hear what others have experienced.

Here are the key details and concerns:

• Type of business: cottage-food style baking (sourdough)

• No employees

• Potential issue: customers picking up from the property

• Main concerns:

– Liability if someone gets sick or injured on property

– Violation of “residential use only” lease language

– Parking/traffic impacting the other unit

– Increased wear/tear, fire risk, or sanitation issues

– My insurance not covering business activity

• Alaska does allow cottage food operations, but as the property owner, I know I can still be on the hook if something goes wrong.

I don’t necessarily want to shut her down completely — it sounds small-scale — but I also don’t want to open myself up to unnecessary risk.

For those who’ve allowed or denied similar situations:

- Would you allow a tenant to run a small sourdough/baking business? Why or why not?

- If you did allow it, what conditions did you put in place? (No pickups, no signage, insurance requirements, etc.)

- What liability or zoning issues should I be aware of as the landlord?

- Has anyone had this turn into a bigger problem later?

Trying to approach this fairly while protecting the property and myself legally. All input is appreciated.

Janice Carter · Answer

In your situation, I would not allow it. Once a tenant starts selling food from the home, you open yourself up to potential liability issues, health department concerns, increased foot traffic and possible violations of local zoning or lease restrictions. Even a small cottage style business can create risks if something goes wrong or if customers start coming to the property.

It is best to maintain the property strictly as a residential space and avoid activities that could impact your insurance, the other tenant or your liability as the owner. I would politely decline and remind the tenant that running a commercial food operation no matter how small is not permitted under the lease.

Peter Mckernan · Answer

I have had a long term tenant that moved out last year run her photography business out of the rental for about 10 years. There was no issues at all, she needed a business license through the city and I helped her get that signed off due to me being the owner, but never had an issue.

The cooking situation might be a bit different since they need a Commerical kitchen and that is a lot more work, permits and everything else. I have a friend who owns their own home and permitted a portion of their garage for a Commerical kitchen to do bread and sourdough.. So, if this tenant is going to do stuff legit I would want them to do all this stuff through the city, permit it and then have a contractor that I select do the work, and have an agreement they pay for it and pay for it to be converted back when they move out.

Benjamin Aaker · Answer

You need to have a policy regarding this so you can answer the same way every time. The easiest is to say 'no' to running any business in the property. If you are inclined to allow it, you need to discuss with your insurance agent and banker first. Then, if still going to do it, write a policy which only allows the types of businesses you want subject to approval by insurance and bank. Then be sure to actually follow the policy.

Ricardo R. · Answer

Nickalaus, you’re right to pause and think this through. A little cottage-food business sounds harmless, but as the landlord you’re the one holding the liability bag if anything goes sideways — not the tenant.

A few things from a landlord’s perspective:

1. The big issue isn’t the bread — it’s liability.
If someone gets sick or slips on the steps during a pickup, your insurance is the one getting dragged into it. Most landlord policies don’t cover business activity happening in the unit, even “tiny” cottage businesses.

2. Your lease likely says “residential use only.”
Allowing a business (even small) without adjusting the lease opens you up to, “Well, he allowed this, so why not XYZ?” later.

3. Traffic/pickups can turn into drama fast.
Tenants underestimate this. Even 3–4 people a day coming by can tick off the neighbor/other tenant and suddenly you’re in referee mode.

4. It can grow.
These things start small and then suddenly the driveway is a mini farmers-market pickup zone. You don’t want to end up trying to “un-allow” something later.

If you do allow it, I’d only do it with some guardrails:

• No customer pickups at the property — delivery only.
• No signs, no employees, no extra equipment.
• She must carry her own general liability policy (very cheap for cottage food businesses).
• She provides proof of compliance with Alaska cottage-food laws.
• A written addendum stating you are not liable for any business activity and can revoke permission at any time.

No customer pickups at the property — delivery only.

No signs, no employees, no extra equipment.

She must carry her own general liability policy (very cheap for cottage food businesses).

She provides proof of compliance with Alaska cottage-food laws.

A written addendum stating you are not liable for any business activity and can revoke permission at any time.

Honestly?
If it were my duplex, I’d probably say no on customer pickups and yes on baking, as long as she’s following the cottage-food rules and the business isn’t impacting the property or other tenant.

That gives her a way to run her small hobby business without dragging your property into it. Nickalaus, I really hope this helps, I sent you DM on BP... it's one of the reasons I do this, I hope you can assist. Thank you in advance.

Tenant Wants to Sell Sourdough From Rental—Should I Allow It?

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