Want to become a landlord? Study up on your jurisdiction's requirements
In the current economic cycle, many homeowners are looking for ways to enhance their income by renting out a room, an in-law suite, a garage apartment or the other side of their duplex. In addition, many people who thought they would be home sellers find themselves unintentional landlords.
The level of red tape necessary to make landlording legal varies widely among jurisdictions, and failure to comply can set you up for significant penalties. And all local jurisdictions require that rental spaces meet certain minimum standards for zoning, health and safety.
In the District, if you own and rent out single-family homes, townhouses, duplexes, individual condominium units or individual rooms, the government considers you to be in the residential rental business. You will need to apply for a Basic Business License (BBL) for each rental location. There are separate business licenses and procedures for multifamily rentals, apartment houses with three or more units, and rooming houses with six or more occupants.
The D.C. Department of Consumer and Regulatory Affairs administers the licensing process. To obtain a BBL for a one- or two-family rental, you will need to complete a multi-step process: First, you must register your "business" with the D.C. Office of Tax and Revenue using form FR500, the combined business tax registration application. That's available at http:/
You will need to certify that you do not owe the District more than $100 for any fees, penalties, interest or taxes, and you will need to complete the Basic Business License application using form BBL EZ, available at http:/
You also must register your rental unit with the Department of Housing and Community Development's Rental Accommodation Division, using its Rent Control Registration and Claim of Exemption form. That can be found at http:/
Your rental unit in the District must pass inspection by the Consumer and Regulatory Affairs' Inspections Division. Inspectors will look into three basic issues: household composition (how many people are living at the residence, for example); the general condition of the rental unit (Are there hard-wired smoke detectors near sleeping areas? Do all of the sleeping rooms have emergency escapes? Are all appliances installed properly and in safe working order?); and whether the landlord has the required certifications for water/sewer, heating, ventilation and cooling systems. A sample checklist is available http:/
Finally, you will need to obtain a Certificate of Occupancy permit for the rental unit. (Owner-occupant landlords will need to obtain a Home Occupation Permit.)
Penalties for not complying with the red tape can far outweigh the cost of obtaining permits. Fees for a single-family rental BBL, good for two years, total $173. Failure to comply with these licensing regimes can subject you to a $1,000 fine for your first offense.
In Maryland, these matters are handled at the county (and incorporated municipality) level. For example, residents of Montgomery County seeking to rent out an entire single-family home or condo unit must register using the Rental Facility License Application, available at http:/
Licenses are valid from July 1 to June 30 each year. Annual fees for these licenses are $98 for single-family houses and $56 for condominiums. Applicants must appoint a resident agent, who can be themselves or someone else who resides in the state and who will be responsible for receiving official legal notices.
Owners of properties built before Jan. 1, 1950, must also certify that their property has been registered with the Maryland Department of the Environment. Additional information is available at http:/