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Rental Housing is a Business

Are you a potential landlord considering renting out residential property in D.C.?  There are a couple things you need to know.

If you own residential property in the District of Columbia, you must register the property with the D.C. government before leasing that property to a tenant.

STEP 1: A BUSINESS LICENSE

Renting out a property is considered a business, and businesses in the District of Columbia must have a Basic Business License (“BBL”) to legally operate, even if your goal is to rent one single-family home, for example.  The agency responsible for issuing basic business licenses is the D.C. Department of Consumer & Regulatory Affairs (“DCRA”).  Prospective landlords may apply for a basic business license through DCRA’s website, in-person or by mail.  To do so, a landlord must submit:

  1.   A BBL Application from DCRA;
  2.   Corporate Registration from DCRA (unless you are a sole proprietor);
  3.   Tax Registration (Form FR-500) from the D.C. Office of Tax and Revenue;
  4.   Certificate of Occupancy from DCRA (If renting two or more units); and
  5.   Rental Accommodation Registration Form from D.C. Department of Housing and Community Development (“DHCD”).

When completing the BBL application, you must certify ownership of the property and state the type of business entity under which the application is being submitted (Ex. Sole Proprietor, Partnership, Limited Liability Company, etc.).

If your business is anything other than a sole proprietor, you must register with the Corporations Division of DCRA and submit proof of registration with the BBL application.  The BBL application also requires applicants to sign a “Clean Hands Self-Certification,” stating that your business does not owe more than $100 of outstanding debt, penalties and fees to the District of Columbia government.

All BBL applicants must submit the Tax Registration Form (FR-500).  The FR-500, or Combined Business Tax Registration Form, is used to register a business so the D. C. Office of Tax and Revenue (“OTR”) can collect taxes. This form may also be submitted online through the OTR website.

If your property is not a single-family dwelling, then you will also be required to obtain a Certificate of Occupancy from DCRA.  A Certificate of Occupancy is a document that specifies the use of a building and must be posted in a conspicuous place on the premises to be rented.

Additionally, you must submit a DHCD Rental Accommodation Division (RAD) Registration form.  This form is to either register for, or claim an exemption from, rent control requirements.  Every housing accommodation or rental unit must be registered by filing a RAD Registration and Claim of Exemption form. Once registered, the housing accommodation or rental unit is assigned a registration number. If the housing accommodation or rental unit is subject to an exemption, it is assigned an exemption number.

STEP 2: PROPERTY INSPECTION

All applicants for a BBL in the One Family Rental category are required to have a housing inspection within 45 days of receiving their BBL.  Appointments for housing inspections are scheduled and conducted by DCRA. This inspection is performed to ensure the premises comply with District housing codes, and is necessary to ensure the health and safety of renters.  Any issues identified during the inspection must be remedied in order to rent your unit.

STEP 3: REGISTER RENTAL HOUSING PROPERTY WITH DHCD

The RAD form, which is part of the BBL process, must also be filed with DHCD after the BBL has been issued. At that point, if you are a prospective landlord and follow the above-listed steps, you should be able to register your rental property in the District of Columbia and collect rent legally.

Please note that the above example is for informational purposes only and does not constitute legal advice.  If you are a prospective landlord seeking the advice of counsel, please contact our firm through the “Contact Us” page on our website or calling (202) 795-9999.

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