7 Myths and a Truth about Licensing Your Unlicensed Rental Property

1. The City will never know. The Housing Department gets calls all the time from tenants living in unlicensed basement apartments, whole houses, or even a few rooms within a larger unit. We also hear from City and County officials and other residents. These calls and complaints come to the City when your neighbors begin to see new people at your home, your tenants are noisy or disruptive, and/or there are maintenance issues at the property. The landlord doesn’t make repairs on time, doesn’t return the security deposit, or doesn’t provide proper notice for entry.
2. I’m a great landlord; that will never happen. Demonstrate that you are a great landlord by licensing your rental property. Completing the licensing program protects you and the health and safety of the tenant. Often, tenants do not know that they are renting an unlicensed property until they contact the housing department with a problem or a question. What starts as a good landlord and tenant relationship could end poorly. Landlords without rental licenses have no standing in court to proceed with an eviction and may unnecessarily expose themselves to liability because they have not had the rental property inspected before a tenant takes possession. Protect yourself and get a license.
3. The rental licensing process is way too complicated. The requirements for a rental housing license are completing an application, paying a licensing fee (this year it is $110 per unit), passing a lead risk inspection, a code-compliance inspection to make sure the property is up to health and safety standards, and a one-hour online course to acquaint you with local, County, and State laws regarding rental property. That’s it.
4. But the County permit process is the hard part, right? If you are licensing an apartment inside your residence or an addition to your residence, you do need to also apply to the County for permission for this Accessory Dwelling Unit (ADU). The application process has been streamlined and the regulations eased to allow for many more ADUs than in the past.
5. The City or County will be at my property all the time. Renewal of a rental license requires a new code-compliance inspection. County inspectors conduct these inspections on behalf of the City. If your property is in good shape, this happens once every two years; otherwise it is an annual inspection. If you maintain your property and conduct your rental business properly, that’s it.
6. I’ll get hit with a big fine if I admit to having an unlicensed rental. Not if you get it licensed. If the City contacts you because the existence of the unlicensed rental has been flagged, you are given two weeks to submit the initial license application without penalty. If you voluntarily come forward and start the process, there is no penalty.
7. The City won’t let me charge what I want for rent. Takoma Park’s rent stabilization law does not apply to single family homes or ADUs. It does apply to individual condominium units and multiunit properties (two or more rental units), but you set the initial rent.

The truth: The Housing Department is here to help. If you want to learn more about licensing your rental property, start with our Rental Licensing web page. Go to www.takomaparkmd.gov and search on Rental Housing Licensing. Still have questions? Email Licensing Specialist Patti Mallin at pattim@takomaparkmd.gov or call 240-315-6721.

This article originally appeared in the September 2020 Takoma Park Newsletter.