Legal Requirements for Owners of Rental Properties
As an owner of rental property in the District of Columbia, you receive many benefits. Before getting started, however, you will need to complete certain forms to obtain the required District of Columbia Basic Business License (BBL). This involves registering your business (the rental) for tax purposes and determining whether you are or are not subject to rent control (most owners will not be). In addition, if you have been living at the property, you will need to revoke the Homestead Deduction which has reduced your real estate taxes while you lived there. The BBL is a requirement, and we would like to make sure our clients are in compliance with the law.
Applying for the license involves registering your business (the rental) for tax purposes and determining whether you are subject to rent control (most owners are not). In addition, if you have been residing at the property, you will need to revoke the Homestead Deduction which has reduced your real estate taxes while you lived there.
Please use the information below to help make the process go smoothly and let us know if you have any questions.
Or, you may fill out the FR-500 Tax form and the Basic Business License-EZ FORM online. The RAD Registration/Claim of Exemption form must be submitted in person. If you have been residing at the property, you will also need to send the Revocation of Homestead Deduction form to the Tax Office.
A: For the FR-500 Tax Form, the answer to question
- 3a) is “Real Estate Rental and Leasing,”
- 3b) is “Real Estate,”
- and 3c) is “53111–Lessors of Residential Buildings and Dwellings,”
- 4) Business Name is Your Name,
- 6) the Business Address is the property that will be rented,
- but for 7), the mailing address should be your personal address or Yarmouth Management (309 7th Street SE, Washington, DC 20003), not the rental property address.
- 16) You will generate business income within the District.
- 17) is “yes.”
- 18) will be the date you expect the property to be occupied by a tenant.
- 20) “Residential rental.”
- “Do you have employees?” No
- Do not fill out any of the other questions on that page.
- 27) Check “Making no taxable sales and tax is paid to vendors in all taxable purchases.”
- 28) is the same date as 18).
- Step 6, You do not have any DC locations that collect sales taxes.
- 29) the answer is no.
- 30) not applicable
- Step 8 both no.
- Finally, on Step 9, either do not register for the taxpayer Center or the authorized agent would be yourself and anyone else you designate–a person with your power of attorney, for instance.
You are done.
A: To complete the BBL E-Z Form online,
- For the first step, select “one family rental” for a single family house or a single condominium unit, “two family house” for a house with a separate apartment and a certificate of occupancy, or “Apartment” for a multi unit building.
- If you choose “one family rental,” you are not required to provide a Certificate of Occupancy number in step 3. In fact, you won’t be able to. If you have two or more units, you will complete that section giving the Certificate of Occupancy number and Issue Date. To check on the Certificate of Occupancy, go to the District’s Property Information Verification System, put the rental property address in, and click on Occupancy when you get to your property.
- In step 4 you need to put in addresses three times. The first is the address of the property that will be for rent. You can press a button to repeat that in the second field. However, in the third address field, DO NOT USE THE ADDRESS OF THE PROPERTY YOU ARE LICENSING. It is important to give either your address where the bills and other information for the BBL are to be mailed or Yarmouth’s address (309 7th St. SE, Washington, DC 20003). Official information from DC should go to you or us, not the rental property.
- In step 6, if you are living outside of the District, you will need to have a registered agent. That can be a friend or neighbor living or running a business in DC or almost anyone at Yarmouth Management.
The rest is pretty self-explanatory. Please forward the link to your license once you have completed the process.
A:The RAD Registration/Claim of Exemption Form, which you will complete by hand, should be turned in at 1800 Martin Luther King Avenue SE, on the second floor.
A: If it is not possible for you to file these forms yourself, you may hire a facilitator to handle filing them on your behalf. Many of our clients have used a very competent individual, Michele Miller (703-946-9512, firstname.lastname@example.org), for this service. She will be happy to discuss licensing details and fees with you.