A landlord is someone who owns a property and lets someone else live and use the property in exchange for rent.
The landlord may own one property or multiple properties. Being a landlord is a viable business option to earn a secondary income.
Though renting houses is a profitable business, many first-time landlords are unsure about how to go about the business.
They have many questions such as do you need a license to be a landlord, the qualifications to be a landlord, etc. but are not sure how to get answers.
Renting houses to earn a profit is a business. Like any other business, understanding the rules and regulations about landlord licensing and permits is crucial to a successful rental business.
Staying compliant with all the licenses and regulations is vital to safeguard your property, tenants, and personal interests.
Do you need qualifications to be a landlord?
Anyone can become a landlord as there are no specific qualifications to become one.
However, it is important to familiarize yourself with the Federal, State and local housing laws, landlord laws, property management, and best practices to be successful as a landlord.
Do you need a business license to be a landlord?
Landlords are required to register their properties and obtain specific licenses before renting out the properties.
While the regulations and permits vary from state to state, there are two common licenses that landlords have to obtain before starting their business.
Certificate of occupancy
The certificate of occupancy must be obtained from the local building or zoning regulatory authorities.
The certificate is proof that the building is built and maintained to be fit for occupancy and complies with all the zoning and building codes.
The landlord must submit the certificate of occupancy along with the building permit to the local authorities.
Housing business license
The housing business license is obtained after getting the certificate of occupancy. The forms for housing business licenses vary depending on the type of property being rented.
For example, the form for an apartment unit will be different from the form for a single-family home or a duplex.
In some states, you will be required to obtain a housing business license for every unit you wish to rent out., while others permit one license for one legal entity, no matter the number of units rented.
Do you need a real estate license to be a landlord?
If you are renting out your own property, you do not need a real estate license to be a landlord.
However, if you are in the business of managing someone else’s property or negotiating deals for properties you don’t own, you will require a real estate license.
Consequences of not having a landlord license
When your state or local laws mandate having a landlord license to rent out a property, it is advisable to comply with the law. The consequences of not having the mandatory licenses and permits can result in
- Heavy fines for illegally renting the property
- The government can order you to stop the business completely
- You may not be able to evict a bad tenant as you did not comply with the law
- Your insurance coverage may be affected due to non-compliance with the law and not disclosing facts.
- Sometimes not getting the necessary licenses and permits can also lead to prosecution.
How to apply for a landlord license
The process of applying for a landlord license may slightly differ from one state to another.
You must check the local rental housing mandates to get detailed information about the housing business licenses.
However, these are some common steps in applying for a landlord license.
- Check the zoning map and ensure that your property is compliant with all the zoning regulations.
- Obtain the certificate of occupancy from the building or zoning regulatory authorities.
- Register your business with the appropriate office.
- Fill out the housing business license application according to the type of your property. This application can be filled out online.
- Pay the requisite fee.
- Register for a housing inspection, which is mandatory to prove that your property is compliant with the regulations and is safe for living.
- After receiving the inspection report, make the recommended changes and register for another inspection.
- Wait to receive the license.
Tribunal court laws and various regional regulations:
Do I need a license to rent my house in Texas?
Landlords in Texas do not require a rental license. However, it is advisable to check the local laws of your city for specific information on rental licenses.
Do I need a license to rent my house in Maryland?
Most of the counties in Maryland do not require a residential rental license to rent out properties to tenants.
However, some counties such as Baltimore, Anne Arundel, Alleghany, Baltimore City, Carroll, Dorchester, Howard, Montgomery, and Prince George require landlords to have a rental license.
Do you need a license to be a landlord in Florida?
Florida does not have a statutory requirement for landlords to have a license before renting out their own property.
However, if you plan to give out your property as a vacation rental or a transient public lodging establishment, you have to obtain a license from the Florida Department of Business & Professional Regulation (DBPR).
Do you need a license to be a landlord in NY?
You do not need a rental license to be a landlord in New York. However, it is crucial to check the local laws of your city for specific information.
Do you need a license to be a landlord in Ohio?
According to the statute, landlords with a rental property in a county with more than 200,000 population, must register their property with the auditor’s office of the county, where the property is located. This is a one-time registration and the fees vary from county to county.
The information required to register the property is the name, address, and telephone number of the owner, along with the street address and permanent parcel number of the Residential Rental Property (RRP).
Do you need a license to be a landlord in California?
Landlords in California do not need a rental license to rent out their properties. However, the rental licensing laws may vary from city to city.
For example, you must obtain a business license, if you rent out more than four properties in Los Angeles. It is also mandatory to register the property with the Los Angeles Housing Department before renting it out.
Cities such as Santa Monica, and San Diego require landlords to have a rental license.
Do you need a license to be a landlord in PA?
You do not require a landlord rental license to rent out properties in PA.
