Some Facts and Myths Surrounding D.C.’s Landlord Licensing Requirements

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Purchasing a rental property can be a life-changing experience that provides immediate cash flow and a significant return on your investment in future years. Landlords have some obligations to meet, though, which will take some work. 

You’ll have to worry about finding and vetting tenants along with maintaining and repairing the property after buying it, for instance, which requires some effort. Taxes, damage deposits, and utilities are other concerns you’ll have to consider as a landlord because failure to plan ahead could bring financial penalties.

You should also be aware of Washington, D.C., landlord licensing requirements. A Basic Business License (BBL) from the Department of Licensing and Consumer Protection (DLCP) is necessary before renting your property to a tenant, no matter the unit’s size. Obtaining a license is relatively straightforward but will require some action on your part.

Do you need a license to be a landlord? The answer is yes, and this guide examines some myths and facts regarding Washington, D.C., landlord licensing requirements.

Landlord Licensing Myths You Might Have Heard

Many landlords hesitate to get the necessary licensing because of a few myths surrounding the process. Understanding how licensing works can ease your mind as you apply for yours and work to legitimize your rental property. Some misinformation you might encounter includes the following:

You Don’t Need a License

You can probably get away with renting your property without a business license, but it isn’t recommended because of the repercussions it could bring. The reason is that you won’t have any legal recourse if you run into a problem tenant who stops paying rent or damages your investment home. Investing in a BBL protects you in these scenarios by ensuring you can pursue legal action, making it the right thing to do for the long-term viability of your property. 

You’ll Receive a Fine When Retroactively Getting a License

Some landlords start renting their properties without a license and believe authorities will fine them if they retroactively get their licenses afterward. Local governments won’t fine you for obtaining your BBL later on, but you could face problems if they catch you without one. It’s best to start the licensing process immediately, even if you currently have tenants in the house but don’t have a license.

Getting a BBL Takes Forever

Applying for and receiving your BBL isn’t necessarily a swift process, but it won’t take too much of your time, either. You can apply for the license online, so there’s no need to wait at a DLCP office, and you can book your property inspection online, too. You’ll also need a certificate of occupancy and a registration with the Department of Housing and Community Development’s Rental Accommodations Division.

Dispelling myths is vital as you learn about D.C.’s landlord licensing rules. Understanding how these licenses really work can help as you continue your journey as an investment property owner.

Five Landlord Licensing Facts You Should Know

Gaining further insight into BBL licenses for landlords can ease your mind as you begin the process. Gathering this information helps ensure you handle everything properly and legitimizes your rental home with few problems. Some facts you should know about landlord licenses in D.C. include the following:

1. Each Property Requires a License

You’ll need a separate BBL for every investment property you rent to tenants. The license you receive applies solely to the address you register, so you must go through the process again if you purchase additional units. There’s a fee associated with each license you apply for, as well.

2. Multiple License Types Exist

Different license types are obtainable for apartment buildings, one-family units, and two-family rentals. Apartment licenses are only necessary when you own the entire building, and the amount you’ll pay ranges between $453.20 if the building has three units to $883.30 if there are ten units. Single-family rental licenses are $198 per year, and two-family options will cost you $283.80 in 2023.

3. You’ll Need a Housing Inspection

A Department of Buildings Inspection and Compliance Administration housing inspection is necessary to obtain your BBL. The free assessment ensures the home is safe for your renters to occupy. There’s a $90 re-inspection fee if you fail your initial inspection, and you’ll have to rebook the appointment and pass the review within 90 days.

4. A Certificate of Clean Hands Is Necessary

You must prove you don’t owe the District of Columbia any money by obtaining a Certificate of Clean Hands. You can only receive this certificate if you don’t owe the government more than $100 for fines, taxes, penalties, or fees. Obtaining a Certificate of Clean Hands is simple, as you’ll log into your D.C. tax account and generate it instantly.

5. You Must Register With the Rental Accommodations Division

Registration with the Department of Housing and Community Development’s Rental Accommodations Division is necessary as a D.C. landlord. This registration ensures compliance with the Rental Housing Act of 1985 and protects tenants from unlawful evictions and rent increases. You could be exempt from these rent control protocols in certain situations.

Knowing the facts surrounding D.C.’s landlord licensing ensures you’re on the right side of the law and have the protections you require as a property owner. Ignoring these laws and requirements could leave you in a challenging situation if you experience difficulties with your renters.

Don’t Take Any Chances With Your Rental Property

Your rental property is an investment in your future, so you don’t want to take any chances. Understanding D.C. licensing requirements and following through on your obligations provides protections and ensures local authorities can intervene if you must evict a tenant. Receiving professional assistance from a property management firm can also minimize the challenges you’ll have to deal with personally.

Nomadic Real Estate offers property management services in the metro D.C. area. Our team will vet potential tenants, collect rent, handle repairs and maintenance, and take care of the day-to-day operations of your rental home, reducing your workload, time commitment, and stress. Contact Nomadic Real Estate for information on how a property manager can help you.

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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. 

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Navigate to the "Reports" module in your portal:

Owner Portal Reports
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Enhanced Rent Roll Report:

Enhanced Rent Roll Report
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Income Statement by Month Report
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The Documents area contains monthly financial statements:

Owner Portal Documents
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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
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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
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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.