Apartment buildings (referred to as Apartment Houses in the D.C. municipal regulations) are properties that have 3 or more units in a building (condos and coops excluded). These units are completely separated and self-contained.
Required filings and inspections
In the following sections, we’ll explain the licensing process for an apartment house rental, which involves several filings and an inspection. It includes the requirements, timeline, general information, and other details.
In D.C., renting property and collecting income, no matter how little or how much, is considered a business activity. Accordingly, you have to obtain a Business Tax Registration, much like you had to obtain a business license. The Business Tax Registration will require you, whether you are a D.C. resident or not, to file a tax return with the DC Office of Tax and Revenue, on an annual basis, to report your rental income. Once your tax return is processed, you’ll have to pay the associated tax, known as the Unincorporated Business Franchise Tax, if the applicant is not a corporation. Otherwise, corporations have to pay a Corporate Franchise Tax.
As of 2021 the Corporate and Unincorporated Franchise Tax rates are 8.25%. Additionally there is $250 minimum tax if your gross receipts are $1 million or less.
Business tax registration is included as part of RentJiffy’s basic license package.
The Basic Business License for an apartment house endorsement is the application you need to rent your property. Note: The applicant must be the owner listed on the property deed.
The Basic Business License is included as part of RentJiffy’s basic license package.
RAD Registration is known as the application process that will either register you for rent control or request exemption from rent control.
The RAD registration is the last step in the process.The Rental Accomodations Office does not allow this filing process to begin until the license is issued and typically issues the RAD Registration a few days after the license is issued.
RAD Registration is included as part of RentJiffy’s basic license package.
A CO is required in order to apply for and obtain an Apartment House Rental license. The CO must state the property’s use as apartments, apartment house, or have language that specifies the number of units in the property. The CO must be in the property owner’s name.
If you are unsure if a CO exists for a property, contact us. For a $25 fee, we will do a thorough archive search. We can’t make any promises, but we have found COs going as far back as 1932.
If we find a CO that might be usable for your two-unit property, then your best option would be to initiate a change of ownership process. RentJiffy can assist you with the change of ownership process for an additional fee.
If the property is owned by a business entity such as an LLC or Corporation, the company that owns it must be registered with the D.C. Office of Corporations before a license can be issued.
If your property is owned by a company, and that company was registered outside of D.C. (such as Maryland or Virginia), you will need to complete a Foreign Entity Registration. This is not included as part of RentJiffy’s basic license package, but we can take care of all of the requirements for the registration for a separate fee.
For an Apartment House Rental license, you may be required to have up to two different inspections for your property.
If you will be changing the ownership of a CO and the CO is 10 years old or older, then you are required to have an inspection to make sure the property meets the zoning requirements. Also, if there was any construction on the property, whether under the current or previous ownership, and a third-party inspection company closed the permits (instead of it being done by a D.C. building inspector), then you may be subject to a third-party oversight inspection. This is where a D.C. inspector makes sure the work was done in accordance with D.C. requirements. If a third-party oversight inspection is needed as well as a zoning inspection, the D.C. building inspection office will combine the inspections.
Getting an Apartment House Rental license does not require an inspection before the license is issued. The reason? Apartment houses fall under the District’s Proactive Inspection Program, which is a property maintenance inspection program that performs inspections periodically. The program’s goal is to routinely evaluate properties for code compliance. The frequency of inspections is determined by an algorithm, set by the Department of Consumer and Regulatory Affairs, to find and inspect apartment buildings with an increased likelihood of violations. According to DCRA, the algorithm takes into account factors such as the building's age and the landlord's history of code violations.
The timeline for apartment house rental can greatly vary depending on if the owner has a certificate of occupancy, whether the CO is in the name of the owner, and if a change of ownership needs to be completed.
- If the owner has a CO in their name and only needs a license, it could take 3-10 day days.
- If the owner has a CO from a previous owner and the CO is less than 10 years old, it could take 30-45 days to change the CO ownership, have a license inspection, and finally a license issuance.
- If the owner has a CO from a previous owner and the CO is 10 years old or older, it could take 30-75 days to change the CO ownership, have a CO inspection and a license inspection, and finally a license issuance.
Note: If an owner does not have a CO, contact us for more information
An ADU does not qualify for an Apartment House Rental license. If your property has an ADU, you will apply for a one-family rental license.