FAQ – DC Rental Licensing

FAQs

Frequently Asked Questions

If you have any more questions that aren’t addressed below, feel free to get in touch. We look forward to working together.

1. What is a license to rent?

2. What are the services that DCRL offers?

– Obtaining the Basic Business License (BBL)
– Registering residential rental properties with the Rental Accommodations Division (RAD)
– Registering residential rental properties with the DC Office of Tax & Revenue (OTR)
– Coordinating the required Dept of Buildings (DOB) licensing inspection
– Obtaining the Certificate of Occupancy for multi-unit properties
– Pre-Licensing Inspection
– BBL Renewal Services

3. How often does a business license need to be renewed in DC?

4. What do inspectors generally look for?

5. What happens if I fail the inspection?

6. Is a condo considered a multifamily property?

7. Can I use a CO detector that plugs into an outlet?

8. Does the property need to be inspected when I renew the license?

9. Do I need a Certificate of Occupancy?

10. How much is the rental license?

11. What are the consequences of not being licensed?

If you are found to be renting a property without a valid business license, the Department of Buildings (DOB) considers you to be non-compliant and can issue you a Notice of Infraction. Note: The first offense is considered a Class 1 infraction and carries a $2,000 penalty. If you continue to incur infractions, be aware that each subsequent infraction will be double the amount of the previous one, going up to $16,000 per infraction. Additionally, when you are not licensed or your license isn’t valid (expired), you can be penalized in court. For example, if you are a non-compliant landlord, a judge can find you at fault because you were collecting rent illegally. The judge can then reverse all rent back to the tenant, sometimes at 3x the amount paid. Another possible scenario: Your tenant(s) would not have to pay their rent, and you would not be able to evict them.

12. I am renting my property and I already have tenants. But I am not yet licensed. Am I going to be fined?

13. I have multiple properties. Can I put all of them on one license?

No. Because each rental property has its own unique property tax identification number, each one is required to have a separate license. For example, if you own 3 condominium units, each with its own tax identification number, you are required to obtain 3 one-family rental licenses. (Don’t confuse this example with a townhouse that has a basement apartment; that property as a whole will have just one tax identification number, and because it is 2 units will require a two-family rental license.)

14. I just had a home inspection when I purchased the property. Can I use that home inspection report to obtain my license?

No. DOB will not accept a report by a private home inspector. You are required to submit to and pass an inspection by a DC Government inspector. Note: the DC Government does not charge to conduct an initial inspection, but it will charge a fee if the property fails and requires a re-inspection. Additionally, the code for a rental property is vastly different than the code for an owner-occupied property.

15. What is Business Tax Registration?

In D.C., renting property and collecting income, no matter how little or how much, is considered a business activity. Accordingly, you must obtain a Business Tax Registration. The Business Tax Registration will require you, whether you are a D.C. resident or not, to file a tax return with the DC Office of Tax and Revenue, on an annual basis, to report your rental income. Once your tax return is processed, you’ll have to pay the associated tax, known as the Unincorporated Business Franchise Tax, if the applicant is not a corporation. Otherwise, a corporation will have to pay a Corporate Franchise Tax. As of 2021, the Corporate and Unincorporated Franchise Tax rates are 8.25%. Additionally, there is $250 minimum tax if your gross receipts are $1 million or less.

16. Do I need a license if I am renting out rooms in my house?

Frequently Asked Questions

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DC Rental Licensing