How to Secure A Basic Business License in DC

Table of Contents

Did you know, that in order to rent your DC property to tenants, it is required by DC law to acquire a Basic Business License? This information tends to come as a surprise to many homeowners, especially if this is your first rental experience. The process itself takes a bit of time, paperwork, and coordination between 3 different DC government agencies. If you are a client of Nomadic Real Estate, you are in luck!  We take on the legwork of coordinating between our in-house inspection team and each relevant governmental agency to get a Basic Business License for your DC rental property.

Doing General Business In Washington DC: The Necessity Of A BBL

If you aim to set up shop or expand existing operations into America’s capital city—be it real estate management or leasing properties—a DC business license should be high on your list of priorities. This crucial document ensures that businesses comply with safety codes and tax obligations specific to doing general business in Washington DC. It safeguards entrepreneurs’ interests as well as those who interact with them from potential frauds associated with unlicensed entities.

The Road To Getting Your Basic Business License

  1. Determining The Need For A BBL:
    Your operation might not require this certification based on its nature, size, type, etc., so checking its necessity becomes important before proceeding further.
  2. Gathering Necessary Documentation:
    You’ll need personal identification documents like a passport or driver’s license, along with proofs indicating operational readiness such as lease agreements, etc.
  3. Filing The Application:
    Once all relevant documents have been collected and checked for completeness and correctness, the application needs to be submitted either online via the DC Government’s Official Online Portal or physically at designated government offices.

How to Obtain a Basic Business License DC

 

Online Application and Fee Payment

The very first step in acquiring your Basic Business License (BBL for short) is to fill out the BBL online form provided by the Department of Consumer and Regulatory Affairs (also referred to as DCRA, for short).

Submitting your license application online simplifies the process significantly. You can provide all the necessary documentation without the need to physically visit any agency offices, making it efficient, quick, and hassle-free.

For the rental property, you must provide details such as its address, square footage, and unit count to complete the application form accurately. Accuracy is crucial here, as mistakes could lead to delays or even the denial of your BBL request. Therefore, double-check everything before submitting the form.

Once you have completed the form, the next step is fee payment. Yes, there is a cost associated with applying for each BBL issued by DCRA, which is also known as the basic business license DC residents are required to pay when renting their properties.

The cost of obtaining a BBL from DCRA can differ depending on elements such as the size and kind of rental property.
So, how do you determine the exact amount you should be paying? This is where official resources come into play.
DCRA provides detailed fee schedules that will help you determine precisely what costs apply in your case.

It is important to note that these payments are non-refundable, whether or not leasing activities actually commence post-approval.
Additionally, do not forget about other potential expenses, such as inspection charges and third-party endorsements. It is always a good idea to budget extra to be on the safe side.

After you’ve paid the fees, hang tight for approval before you start your leasing activities in DC. Make sure everything’s on the up and up to avoid any hiccups.

Clean Hands Self Certification

The next step in acquiring your Basic Business License is to fill out the Clean Hands Form. What this does is, it essentially tells the government that you are cleared of owing substantial amounts of money in taxes, parking fees, or any other types of government-issued fines.

Mastering Registration with the Office of Tax and Revenue

This might seem complex, but it’s quite straightforward when you understand the process. One key step is registering your property with the District’s Office of Tax and Revenue (OTR). This critical move sets up your tax account, allowing you to meet all financial obligations linked to owning real estate within the district.

The Nitty-Gritty: Filling Out Form FR-500

When it comes to successful tax registration, knowing how to correctly fill out Form FR-500 is paramount. The form has multiple sections that require accurate details about your business or property.

Provide your business’s identifying details, such as legal name, trade name (if applicable), social security number or employer identification number (EIN), and physical address, among others. Make sure these details are consistent with those on record at other government institutions like the IRS because discrepancies can lead to future complications.

The following sections ask for specific aspects related to your business activities, such as the type/nature of the conducted activity and expected annual gross receipts. Be truthful while filling out these fields since misleading information could result in penalties down the line.

Beyond submitting a paper version via mail or hand-delivery at an OTR office location, homeowners have another option – using the MyTax.DC.gov portal to file their applications electronically, including Form FR-500 submission. This web-based system offers 24-hour access and provides immediate confirmation upon submission, adding convenience and speed to the application process. However, make sure to carefully read all instructions provided before starting the procedure to avoid errors and missteps along the way.

This electronic platform not only provides efficiency but also offers real-time updates regarding status changes relating to user accounts, ensuring transparency between taxpayers and local authorities. The District of Columbia Government’s regulations concerning the possession and running of residential and commercial buildings within Washington D.C.’s limits can be easily monitored with this system, helping to ensure that everything is in accordance with what is required.

Decoding Rent Control and Exemption Filing in Washington DC

The Department of Housing and Community Development requires any landlord renting out a residential property to file for rent control. If a property is less than 3 units, you would need to file for a rent control exemption.

In the realm of property management, particularly in Washington DC, navigating rent control or exemption filings is crucial. The laws surrounding these business activities can be complex but are vital for any landlord renting out residential properties.

For landlords with fewer than three units, exemption from standard rent controls may be available, allowing for more flexibility in setting rental rates and ensuring regulation of the real estate industry. This not only offers flexibility when setting rental rates but also maintains regulatory oversight within the real estate sector.

The landscape of rent control regulations isn’t universal across all types of properties. Therefore, understanding your obligations based on the nature and size of your property becomes essential to ensure compliance with local laws.

This involves familiarizing yourself with the resources provided by the Department of Housing and Community Development (DHCD). Landlords can access detailed procedures on filing their properties either as subject-to-rent-control or exempt-from-rent-control based on specific criteria set by DHCD.

Tackling Exemptions

A silver lining exists for those managing properties with fewer than three units: potential eligibility for a rent control exemption. However, this doesn’t mean bypassing regulation entirely – it merely alters how these rules apply to your leasing operations within the Washington DC area.

  • Assess Eligibility:
    Before initiating any filings, take the time to review the eligibility criteria using resources offered by DHCD. This step helps avoid unnecessary delays due to misunderstanding housing regulations.
  • Gather Required Documentation:
    Have all necessary documents at hand before beginning the application process. Ownership papers could be among the other location-specific required documentation.
  • Familiarize Yourself With the Filing System:
    Utilize the instructions found on official government websites to aid navigation throughout the submission procedure. This is especially beneficial if unfamiliar system functionalities are involved.

So, what’s the takeaway? Staying in the loop with all shifts impacting real estate is crucial.

DCRA Proactive Safety Inspection

For the last and final step of acquiring your Basic Business License, you will need to set up an inspection with the DCRA. The DCRA will send an official inspector to your residential property in order to ensure that your property is up to code and up to DC’s safety standards for tenant move-in.

If you are a client of Nomadic Real Estate, we send our own representative alongside the DCRA inspector to document the results of the inspection. From there we utilize 12 years’ worth of relationships with local vendors to ensure that your home is up to city code and safety standards.

If you are considering whether or not to hire someone to manage your property, click here to get in touch. We would love to talk to you, and give you a free quote today!

Basic Business License DC: Recap

Getting your basic business license in DC is a crucial step in launching and maintaining any business within the city.

You’ve learned about the importance of the license and the steps required to obtain it, including the online application and fee payment.

We also discussed the Clean Hands Self Certification, which is a necessary part of the process. Additionally, it’s important to remember that you need to register with the Office of Tax and Revenue.

Furthermore, if you plan on renting out residential properties in DC, don’t forget to file for rent control or exemption.

All of these requirements may seem overwhelming, but with the right knowledge, they can be managed effectively.

If you’re in need of assistance navigating through this process, contact Nomadic Real Estate.

Our team specializes in Washington D.C. real estate transactions, including leasing, property management, and sales. We have a solid understanding of DC’s complex licensing requirements, including obtaining a basic business license.

Let us guide you on your journey to success!

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Enhanced Reporting

Your portal includes a selection of extremely useful reports. Reports are available in the “Reports” section, and are distinct from the financial statements. Unlike financial statements which are static records, Reports are dynamic real-time records that will update with current data every time you view them. 

Scroll down to learn more about Reports:

Navigate to the "Reports" module in your portal:

Owner Portal Reports
  • Keep in mind, these reports are dynamic records. They will refresh to display current information every time you view them. 

Enhanced Rent Roll Report:

Enhanced Rent Roll Report
  • The Enhanced Rent Roll Report will show the rent amount, last payment date, move-in date, lease expiration date, and security deposit amount for each of your tenants. 
  • It will also show a portfolio summary with occupancy percentage, vacancy loss, and more!

Unit Comparison Report:

Unit Comparison Report
  • If you own multiple units (or buildings) with Nomadic, you’ll get access to the Unit Comparison Report. 
  • This report enables you to quickly compare financial performance between your units at a glance without toggling between individual reports. 

Income Statement Month-Over-Month:

Income Statement by Month Report
  • The Income Statement Detail – Monthly Report serves as a month-over-month record of portfolio performance. You’ll see itemized income and expense categories and can track monthly. This report will update with fresh data every time you view it. 

Financial Statements

Financial statements will be published to your portal on a monthly basis. The statements are found in your Documents library, and provide a historical record of all financial performance. The statements serve as a snapshot of financial performance over a given period, and are static documents (unlike Reports, the statements do not update/change in real-time). 

Scroll down for more info about the Financial Statements in your Documents library:

The Documents area contains monthly financial statements:

Owner Portal Documents
  • The statements in the Documents are are static documents. They are posted to the portal once a month to serve as a historical record of financial performance. 

Download a statement to see month and YTD financials:

Owner Portal Property Statement

You'll also find a month-over-month operating statement:

Month over Month Statement

Portal Communication Tool

You can use your owner portal to communicate with our team. Any messages you send through the portal will go straight to your Account Manager. When we reply, you’ll get an email notification and you’ll also see the message in your portal next time you log in. 

Here’s an overview of using the communication platform:

Click "Communications" and navigate to "Conversations":

Commincation Dashboard Screenshot
  • The communications module will contain a record of all messages that you create through the portal. 

Click the "New Message" button and send your message:

Owner Portal New Message Screenshot

Responses will show up in the conversation ticket:

Portal Conversation Response Screenshot
  • You’ll get an email notification whenever you get a response, and you’ll also see the message in your portal next time you log in. 

You can reply in-line using the comment box:

Owner Portal Comment

Each conversation will be logged in its entirety:

Portal Conversation Snapshot

Understanding the Ledger

Your portal includes a ledger with all transactions. The ledger is populated with data in real-time as transactions flow through our accounting software. Much of this information is also available in the Reports area, as well as the Statements in your Documents library, but the ledger is the most comprehensive resource for diving into the details. 

Please scroll through the sections below to get a better understanding of how to interpret the ledger. 

By default, transactions are sorted chronologically:

Owner Ledger Dates
  • The date reflected in the lefthand column is the actual transaction date, not the “bill date”. This is the date the transaction was actually processed. 

If you have multiple properties with Nomadic, you'll see the address for each transaction in the "Location" column:

Ledger Property Column
  • You can filter the ledger to look at just one property, all properties, or specific sets of properties. 
  • If you only have one property with us, you’ll just see the ledger for that property. 

The Description column displays the transaction type:

Owner Ledger Description Column
  • BILL: this is an expense transaction, such as for repair costs or management fees.
  • CHARGE: this is a transaction  billed to the tenant, most typically a rent payment. 
  • NACHA EXPORT: this is a credit we processed to your distribution account. This type of transaction is how you get paid! 

The Amount column shows the dollar value of each transaction:

Owner Ledger Amount Column
  • Positive Amounts: if an amount is positive, it reflects a transaction that is payable to you. Typically, this will be a rent payment that we collected from your tenants. On occasion, a positive number could also signify a journal entry or credit adjustment. 
  • Negative Amounts:  if an amount is negative, this is a transaction that is either payable to Nomadic or is an amount that has already been paid to you. Typically this will be for repair costs or management/leasing fees. Owner draws (net distributions into your checking/savings account) also reflect as negative amounts, since they have already been paid to you. 

The Account Balance column shows a sum of positive/negative transactions at a given point in time:

Owner Ledger Account Balance Column
  • Account Balance should always equal zero after a net distribution has been processed. When the balance is zero, this means that all expenses have been paid and you’ve received the remainder as net operating income, leaving a balance of zero (meaning: no one is due any money, as all funds have been distributed appropriately). 

Navigating the Propertyware Owner Portal

Your portal includes some extremely useful features that help you understand your property’s financial performance at a new level, with real-time transparency into every transaction.

Scroll through the snapshots below for an overview of portal navigation! If you need more help or have specific questions about using the portal, you can reach out to your Account Manager any time for a screen share. 

You can filter all info by date range or property:

PW Portal Filters

View a snapshot of income and expenses on your dashboard:

PW Owner Dashboard View

See every transaction in real-time on your ledger:

Owner Portal Ledger View

Statements and forms will be posted to your documents library:

Owner Portal Document Library

View a suite of real-time financial reports:

Portal Reports View

See a running list of all bills, and drill down for more detail:

Owner Portal Bills View

Under Bill Details, you'll find dates/descriptions/amounts and more:

Portal Bill Details

You can also communicate with your Account Manager through the portal:

Owner Portal Communication Tools

How do net distributions work?

Net distributions keep your accounting clean and simple. Each month we’ll collect rent from the tenants, deduct any repair expenses for the previous month and any management/leasing fees for the current month, and credit the remaining net operating income to your account. 

Net Distribution

You’ll receive a statement via email each time a net distribution is processed, and can view all transaction details in your Propertyware owner portal.