Tool 1: Rental Registration and Licensing
Rental registration is a local regulation that requires landlords to register with the city and provide the city with essential information. Rental licensing is a local regulation that requires an inspection or other substantive steps as a condition of renting property.
The purpose of registration is to enable the city to find property owners in case of emergencies or code violations, and to make sure the owner understands his obligations under city ordinances. Owners should provide contact information for the owner and/or owner’s agent; if the owner lives outside the area, he should provide contact information for a local property management firm or other agent capable of addressing problems. The registration application form should list key city legal requirements for landlords and require the owner to acknowledge that he is aware of them. The fee for the registration should be modest, reflecting no more than the cost of sending out notices and maintaining a rental property database. Cities should, however, consider imposing a greater penalty on owners who fail to register as an incentive for timely registration.
Rental licensing combines rental registration and inspection. Under a licensing regime a rental property is not eligible for registration unless it is in compliance with key health and safety standards. As a rule, licensing requirements are limited to major health and safety issues, since it is unreasonable to deny a landlord the right to rent her property on the basis of less compelling code violations. If the inspection identifies other violations, however, the landlord should be given notice of them at the same time and given a reasonable period to comply with them. The Boulder, Colorado licensing program requires the following inspections as a condition of rental licensing:
Licensing ordinances typically require periodic re-inspection with the duration between inspections varying widely, from annually to every six years.
Combining registration with licensing is preferable to stand-alone registration, since it ensures – if effectively enforced – that no rental unit goes on the market unless it meets minimum health and safety standards. It is much more labor-intensive, however, and many municipalities may not have the personnel to carry out the inspections required or may be unable to schedule them in timely fashion. One way to deal with this problem is to license private inspectors to conduct the licensing inspections. The municipality could establish a standardized fee schedule to prevent price-gouging, and conduct periodic spot checks to ensure that inspections are being conducted properly.