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.
You MUST fill out the FR-500 Tax form online, and you can complete the Basic Business License 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.
- – 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.
- – Answer all the questions “no,” except for the one about personal property. The city thinks fridges are personal property.
- – The NAICS number is 531110. That will fill in the words.
- – The business 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 “validate 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.
- – For most people, you will use your Social Security number for your ID number.
- – Add yourself as an officer.
- – Answer no to all the questions that have no relation to rentals.
- – The “yes” box will be automatically highlighted on the Personal Property page. Fill in “appliances” in the box asking for all personal 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.
- – For the first step, select “one family rental” for a single family house or a single apartment or condominium unit, “two family house” for a house with a separate apartment and a certificate of occupancy, or “Apartment” for property in a multi unit building.
- – For most people, you will be a sole proprietor, even if you own a property jointly.
- – You have a choice between a 2-year or 4-year license. Make your choice based on your plans.
- – You will need to have the Tax Registration number to complete the form. You will get this after you complete the FR 500 form (see above).
- – DO NOT USE THE ADDRESS OF THE PROPERTY YOU ARE LICENSING as the mailing address. 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.
- – 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.