In the day and age when home prices in the Washington, DC metro area are reaching all-time highs, renting can be a lucrative business in the District. While assistance on the mortgage or extra spending money might sound appealing, it comes at a cost. The District regulates all forms of renting and certain formalities must be met before a housing provider is able to offer a property for rent or possibly face some stiff fines. Complying with the required formalities can be expensive, frustrating, and confusing as it involves three different District agencies, numerous documents, and numerous fees.
In order to become a housing provider in the District and you are not already a corporation, limited liability company, partnership, or in some cases a trust, a company must be created. The housing provider will need to create a company by registering Articles of Incorporation, obtaining a Business Tax Registration through the Office of Tax and Revenue and paying the associated fees.
Then, in accordance with D.C. Code 47-2851.03, the housing provider must obtain a Basic Business License. As part of the application, the housing provider will need to obtain a Certificate of Occupancy if the housing accommodation is for two or more rental units and file a Clean Hands Certification. And of course, a license fee and a rental unit fee will need to be paid. If the intended rental is a single-family home, town home, duplex, individual condo unit or individual room, a housing inspection will be scheduled and conducted to ensure the property is in compliance with the District’s housing code regulations. If all requirements are not met within 45 days from the issuance of the license, the Basic Business License may be revoked, fees paid may be forfeited, and an assessment of additional administrative and civil penalties is possible.
After the Basic Business License application is approved and all the associated fees are paid, the housing provider must file a Registration/Claim of Exemption Form with the Department of Housing and Community Development, Rental Accommodations Division in order to be assigned a Landlord Registration number or an Exemption Number. Last, but not least, the associated fees must be paid.
Failure to comply with these formalities can result in fines as high as $2,000 as a certain couple found out recently while renting to former EPA Administrator Scott Pruitt. While this process can be complicated, Johnson Law Group can assist you in creating a company, obtaining a tax identification, filing the Basic Business application, and obtaining a Landlord Registration/Exemption number. Our lawyers can also assist you if you are already a housing provider but need assistance in complying with all of the District’s formalities. Contact our office for a free consultation today.