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 DC requirement, and we would like to make sure our clients are in compliance with the law.
Please use the information below to help make the process go smoothly and let us know if you have any questions.
- – For most people, you will be a sole proprietor, even if you own a property jointly. Only if you are an LLC or corporation do you need to use another form.
- – For most people, you will use your Social Security number for your ID number.
- – The PHYSICAL address is the property. If it is a specific unit, fill in “Unit” on the pull-down list and put the unit designation in the next box. Do not fill the pull-down if it is just a house. Don’t forget to click on the “verify address” note. Then choose the one with the Zip + 4 that is marked “validated.”
- – Click the box that says “Send mail to another address.”
- – You will use your current personal address as the mailing address. If you are about to move, use the address that will get to you within a week or so, not your new long term address. Again, validate the address in the same manner. If you are out of the country, use Yarmouth Management, 309 7th St. SE, Washington, DC 20003-4307. Please let us know if you are using our address. This address is important because you will receive the tax registration at this address. You need that to complete the BBL form.
- – “Date Business Commenced” will usually be the first of the following month.
- – “Have you previously registered?” Answer “No.”
- – The NAICS number is 531110. That will fill in the words.
- – Answer “no” to all the questions that have no relation to rentals, “yes” to filing as an unincorporated franchise, and “yes” for personal property.
- – Describe your activities as “residential rental.”
- – Your tax year ends at 12/31/XX
- – Answer No to all questions except for business income from having rental property.
- – Verify your answers, then submit. Within a week or so, you will receive a letter with your tax registration number. Once you have that, you can prepare the BBL EZ online.
- – You are done.
- Skip this step if you are a sole proprietor, like most of our owners.
- You only need a Certificate of Occupancy if there are two units or more at the property.
- This is the number that will be generated when you complete the FR-500. They will send you a letter with your tax registration number.
- Sign the clean hands form stating that you do not owe $100 or more to the District of Columbia.
- Select your category: one-family rental; two-family rental; apartment; indicate how many units.
- Most owners will be Sole Proprietor. Put in your name, not entity or trade name.
- Check “Not My Home” and list the rental address. The billing address should be your mailing address or Yarmouth Management, 309 7th Street SE, Washington, DC 20003.
- You can be the agent if you are in DC or Susan Zinter at Yarmouth can be the agent.
Submit. You are done.