Steps to Becoming a Landlord in Washington, D.C.
If you are currently the landlord of a one-family or two-family property, or you hope to become one in the near future, you may have noticed that your D.C. information and resources have been reorganized online.
That is because, effective October 1, 2022, the Department of Consumer and Regulatory Affairs (DCRA) split into two separate governmental departments: the Department of Building (DOB) and the Department of Licensing and Consumer Protection (DLCP).
This article shares key pieces of information for current and future D.C. landlords and provides links to learn more about each topic, including which of the new agencies handle specific parts of the D.C. residential rental business process.
How to Get Started as a D.C. Landlord
DCRA previously shared an e-booklet to provide resources and guidance to current and aspiring D.C. landlords of one-family and two-family rental properties without the assistance of a property management company. Read the entire booklet below or visit the DLCP website for the most up-to-date information on this topic.
Do I need a business license to rent out my property?
Yes, you need a Basic Business License (BBL) with an “appropriate endorsement” to rent out or lease a dwelling or unit in a residential building, pursuant to 14 DCMR § 220.2. The law applies even if you rent the space while you yourself are living in the same property for any amount of time or money.
Apply for your business license on the Department of Licensing and Consumer Protection website.
Do I need to incorporate to be a landlord or can I do it as a sole proprietor?
You do not need to incorporate in order to become a D.C. landlord. You may choose to operate your rental business as an unincorporated business that is owned and operated by one individual, a sole proprietorship. You may choose to form a business entity such as a corporation, limited liability company (LLC), or limited partnership.
If you run your business as a sole proprietor, you do not need to complete registration with DLCP. You will be asked to apply for your business license with your social security number (SSN).
If you operate as a business entity, you must follow the following steps:
- Register your business with DLCP via CorpOnline.
- Apply for a federal Employer Identification Number (EIN or FEIN) through the Internal Revenue Service (IRS).
- Register your EIN/FEIN with the DC Office of Tax and Revenue (OTR).
Seek legal counsel if you are unsure of which business structure to choose.
How do I prepare for my rental business and license?
If your rental is short-term and less than 30-days, find more information here.
For rentals longer than 30 days, pursuant to 14 DCMR § 201.1, you need a BBL plus one of the following endorsements:
- One-Family Rental License Endorsement. This is defined as a single-family individual room within a home, condominium unit, duplex, townhouse, or home.
- Two-Family Rental License Endorsement and Certificate of Occupancy through the DOB. This includes an English basement apartment, converted basement apartment, or carriage house where the owner and tenant occupy the same main residence.
- Apartment House License Endorsement and Certificate of Occupancy through the DOB. This includes buildings with three or more dwelling units.
You can find examples of each type of residence and endorsement in the DCRA e-booklet on Page 7.
It is important to note that all basement units and carriage houses are required to comply with building code requirements for dwelling units, including fire separation, egress, and plumbing and electrical shut-offs.
Another important note is that an Accessory Dwelling Unit (ADU), also called an accessory apartment, is only permitted in specific zones. Find zones and other information about ADUs on the DC Zoning Handbook webpage.
Apply for your business license on the Department of Licensing and Consumer Protection website.
Applicants with apartments are required to register the units with the Department of Housing and Community Development (DHCD) after the DLCP accepts the BBL. Applicants should bring the DHCD-stamped RAD Form to the DLCP for the license to be issued.
An applicant for an Apartment must register with the DHCD after the Basic Business License has been accepted by the Department of Licensing and Consumer Protection (DLCP). Upon registration with DHCD, the applicant returns to DLCP with the DHCD-stamped RAD Form in order for the license to be issued.
An applicant for one-family rentals and two-family rentals must register with DHCD after the license has been issued by DLCP.
If you choose to use a business entity (corporation, limited liability company, or limited partnership), you will need the following:
- Business registration in DLCP’s CorpOnline
- EIN or FEIN from the IRS
- Business Registration Form FR-500 through OTR
- Register trade name (doing business as or DBA) if using a trade name or shortened version of the business entity name using DCLP’s Scout
All rental business owners need to also complete the following steps:
- Obtain Clean Hands certification to confirm you do not owe more than $100 to the D.C. Government by completing a self-certification subject to verification form or apply on MyTax.DC.Gov.
How do I find tenants for my rental property?
As you advertise and manage your rental unit, you must comply with fair housing and anti-discriminatory laws, which are enforced by the DC Office of the Attorney General, Civil Rights Section and the DC Office of Human Rights.
According to the DC Human Rights Act of 1977, it is against the law to discriminate against people based on their race, gender, religion, age, marital status, family responsibilities, political affiliation, disability, source of income (such as subsidies), and other categories listed in the law.
According to the DC Fair Criminal Screening for Housing Act of 2016, rental property owners are covered and may not ask anything related to criminal background before a conditional offer is made to the applicant. However, you do have the right to create financial and credit qualifications as long as the inquiries are applied to each applicant equally and without discrimination.
Tenants both current and prospective may file complaints with either the DC Office of the Attorney General, Civil Rights Section and the DC Office of Human Rights. Learn more on the Office of Human Rights website.
If you hire a real estate professional to help market the property and/or a rental property management professional to help manage the rental unit(s), ensure they are licensed by the DC Real Estate Commission. You can verify licenses with a search through your Access DC account.
What other steps do I need to take before I can rent out the property?
Obtain and pass your Basic Business License (BBL) housing inspection. For owners of one- and two-family rental properties, this inspection must be passed before even submitting a license application. You can find the BBL Inspection checklist on the DLCP website.
You must also have a valid credit card or bank account on file with DCRA in accordance with 14 DCMR § 200.7, to be used exclusively to bill for re-inspection fees and proactive inspection fees. If any billing information changes, it is your responsibility to update the system within 30 business days.
Learn more about abatement, re-inspections, and alternative resolution processes in the e-booklet on Page 12.
How much does it cost to get started as a D.C. landlord?
- One-Family Rental License Fee: $198.00
- Two-Family Rental License Fee: $283.80
- Three or more units: see fee table
- DHCD RAD Registration: $21.50 per unit or $43.00 per unit for a two-year license period
- Proactive Program Fee (three or more rental units): $35.00 per unit
- (If applicable) LLC and Corporation Formation Fee: $220.00
- (If applicable) Trade Name Registration Fee: $55.00
You must also ensure you take care of the following fees if applicable. Payments can be made via the DOB’s Online Payment Portal.
- Fines and settlements
- Re-inspection fees ($90.00)
- Abatement special assessments
- Notices of infractions
- Additional penalties incurred if you failed to pay any of the aforementioned fines or fees
About the DC Department of Buildings and Department of Licensing and Consumer Protection
Each department is now responsible for the following:
Department of Building (DOB)
- Building Inspections
- Code Enforcement
- Construction Code Compliance
- Green Building
- Permitting
- Rental Property Maintenance Standards
- Surveying of the District
- Third-Party Inspections
- Vacant and Blighted Property Enforcement
- Zoning Administration
- And more
Department of Licensing and Consumer Protection (DLCP)
- Business Licensing
- Consumer Protection
- Corporate Registrations and Filings
- Enforcement
- Occupational and Professional Licensing
- Small Business Resource Center
- Special Events and Vending Enforcement
- Weights and Measures
- And more
Read more about this reorganization on the website.
DISCLAIMER: The information gathered here is deemed reliable as of the date of publication. For additional information on this topic contact Evelyn Miller, Partner, at 202-753-7400.
