By Scott Bloom, owner and property manager, Columbia Property Management
A version of this blog post was published in the Washington Blade, Friday, Feb. 17, 2023. We’d like to send out a big thank you to The Blade for their ongoing support in sharing vital rental property information with readers here in the District and beyond.
In Washington D.C., owners who are renting out part or all of their residential property must obtain a Basic Business License, or “BBL.” This includes simply renting out a room in your home. The city government does not consider the rental a legal business without one.
One of the main reasons, which may be obvious, is to protect occupants by ensuring that all landlords adhere to the housing code regulations and that they are providing safe and habitable dwellings. Possessing an active business license also helps landlords protect their rights and interests when dealing with their tenants, particularly if they need to go to court.
Various local companies, such as a business license “concierge” service or a residential property management company offer support to landlords to get their business license. These companies offer services to assist the property owner to do the following:
Determine if a license is required for their rental property. By explaining to potential landlords the requirements for obtaining a BBL, homeowners can determine if the property is subject to the requirement and what type of license is needed.
Evaluate the condition of the rental. Many companies will conduct an evaluation of the rental to be licensed and provide a report to the owner of the top things that need to be addressed in order to obtain a business license. This provides valuable information so that a property owner can increase the likelihood of passing the first city inspection and avoid delays, not to mention the city re-inspection fee.
Complete the BBL application to avoid errors. Trying to fill out the paperwork for the three different city agencies is time-consuming, duplicative and can be confusing. Get help filling out the BBL application and all related documentation to ensure the necessary information is included. That way, you can save time when the application is submitted to the various city agencies and avoid rework.
Submit the BBL application and required documents. Hiring a company who will submit the BBL application can save a lot of time. On the homeowner’s behalf, they will submit the documents to the various city agencies, shepherd the process through to completion and ensure the landlord receives the appropriate city documentation.
Pay the licensing fees. Along with the required documents, the registration fee for the business license can be paid on behalf of the owner and collected later (or up-front). This helps to keep the process running smoothly as fees are submitted at the time they are needed.
Keep track of the license expiration date. Once you obtain your business license through one of these companies you often have support to keep tabs on when the license is coming up for renewal. This is key in making sure it is renewed on time, without the need to pay hefty late fees and penalties.
What are typical pitfalls that property owners should be aware of when getting and maintaining a business license in the District of Columbia?
- Not understanding the requirements for obtaining a BBL.
- Failing to complete the BBL application documents the way the city wants them
- Failing to adequately prepare the rental for the city inspection
- Failing to file required tax forms every year with the Office of Tax and Revenue
- Failing to renew the license before it expires
By partnering with experienced property management companies or business license concierge services, a landlord can have the confidence that the licensing process will go smoothly.
By ensuring you are in compliance with District laws and regulations, you will avoid many of the common problems other landlords experience. Part of that is mindset and part of it can be a real challenge if the property has deferred maintenance or is not up to housing code standards. Hiring an outside company can assist a property owner to get through the process and provide the professional support needed when it all seems overwhelming.
If you are considering renting out your space, make sure it will be legal.
*This article was written with the assistance of AI technology, and the final version was fully edited by Scott Bloom.
Scott Bloom, Owner and Senior Property Manager,
Columbia Property Management
Bloom founded Columbia Property Management in 2012. CPM’s goal is to provide a powerful, personal level of service to our clients. We focus on smaller landlords, professionally managing their assets, so they can succeed by investing in rental real estate.
Scott is an active member in multiple professional organizations including the National Association of Residential Property Managers (NARPM) and serves on the property management committee of Greater Capital Area Association of REALTORS® (GCAAR).
For more information and resources, go to www.ColumbiaPM.com