Most property owners who set out to invest in Philadelphia real estate don’t realize that there are some regulatory hurdles to being a landlord in Philly.
Renting out apartments in Philadelphia isn’t as easy as set-it-and-forget-it.
Here are the basics on getting a rental license in Philadelphia, management agencies, and what else to know about the laws governing owning and renting property in Philly.
What Do I Have To Do To Be a Landlord in Philadelphia?
The number one issue we see with new and even seasoned property investors in Philadelphia is they don’t understand how to navigate Philadelphia’s legal requirements for landlords. To name a few city landlord requirements:
- Every Philadelphia property must have a rental license, which is renewed yearly. Failure to have a rental license is a code violation subject to a $300 daily fine.
- If you live outside of Philadelphia (an absent landlord) you must legally have a Management Company in the city.
- Philadelphia landlords must provide a certificate of rental suitability to tenants, plus a guidebook published by the Department of Licenses & Inspections (called L&I) that describes landlord and tenant rights and responsibilities.
- Landlords of properties built before 1978 must schedule and pay for a lead inspection by a third-party inspector and receive a lead-safe or lead-free certification before you can get or renew a rental license.
- Landlords must maintain basic standards for their rentals described in the city’s property maintenance, fire, administrative, and zoning codes.
The hurdles to being a compliant landlord in Philadelphia – and following ever-changing Philadelphia property laws – are many.
The 4 Steps To Getting a Rental License in Philadelphia
Getting a Philadelphia rental license isn’t hard, but it can feel daunting to the uninitiate given how fragmented the process is.
Getting a rental license looks like this:
- Get a Philadelphia Tax Account Number
- Get a Commercial Activity License
- Get a Rental License
- Get a Certificate of Rental Suitability
- Start renting!
Step 1: Getting a Philadelphia Tax Account Number
The rental license process really begins with a city tax account, which is designed to help the city tax and track rental or business activity. To obtain a Philadelphia Tax account number, visit the Philadelphia Tax Center website here, where you’ll first need to create a taxpayer account before you can begin paying
If you own your property under your personal name, you’ll use your SSN during this process, and if you own the property under an entity name, like an LLC, you’ll use your company EIN.
At completion, you’ll receive an email with your Philadelphia Tax ID number. Keep this information handy, as you’ll need it for your Commercial Activity License application next.
Step 2: Getting a Philadelphia Commercial Activity License
To obtain a Commercial Activity License and begin renting your property, you’ll use the Eclipse system website.
You’ll need to create an account, then you’ll use the “Register for a New Activity License” to register for your new rental activity.
Step 3: Getting a Philadelphia Rental License
You’re nearly there!
Log into Eclipse with your new information, and on the home page use the link to “Apply for a Business License”.
Select the Commercial Activity License that corresponds with the property you’re applying for and fill out the following few pages of information, including address and intent.
Review your application draft, and if everything is correct, click “Pay Online” to wrap up the Philly Rental License process with a small fee that can change year-to-year.
Importantly, it can take this system up to 14 business days to recognize a new rental license number, which you’ll need in the final step.
Step 4: Getting a Philadelphia Certificate of Rental Suitability
Finally, within the Eclipse system, you’ll find near the bottom of the page a link to request a Certificate of Rental Suitability for your property.
Enter your rental license number, obtained in the previous step, and click “Search” to find your property. Then request a CRS report.
The CRS is intended to signify that the owner of the leased space is providing a property that:
- Is safe and habitable.
- Has fire protection and smoke detectors that are in good working order.
Ultimately, a CRS is about safety, which most good landlords and property owners already take seriously to begin with.
In order to get a Certificate of Rental Suitability, you may not have any outstanding violation notices related to the property, except for violations that may be pending appeal where you’ve already notified L&I.
[Read some common FAQs from Philadelphia’s L&I here.]
That’s it! You’re ready to start renting out your Philly property and reporting your rentals properly to the city!
If you’re having trouble navigating this process, a good management company or professional management service like HubKey can help. Call today to find out how we streamline owning property in Philadelphia.
What Is A Management Company for Philadelphia Properties?
Philadelphia law requires that rental properties in Philadelphia must have a managing agent identified, or the owner/manager must live in Philly themselves.
Rental owners who live outside Philadelphia must identify a managing agent with a Philadelphia mailing address on their rental license application. The agent is responsible for interfacing with L&I, while the owner will be listed as the license holder and bear legal responsibility for the license.
For many investors looking to own and rent real estate in Philadelphia, but who don’t live in the area, this can be an unexpected pitfall, particularly given the steep fines when it comes to noncompliance with Philly rental laws.
For those looking for a management company in Philadelphia, a full-service property management company like HubKey may be the better choice.
HubKey can serve as your managing agent and leave the property management up to you. Or, we can also serve as your full-stack property management service provider, leasing to tenants, collecting rents, managing periodic maintenance, and navigating all of the Philadelphia rental laws on your behalf.
In fact, we usually recommend working with an experienced Philadelphia property manager instead of trying to do it yourself – all of the reward of owning Philly real estate with none of the regulatory and tenant headaches. We take care of the small stuff (like fielding tenant phone calls in the middle of the night) and the big stuff (like making sure your rental in Philadelphia is up to code), leaving you free to pursue your property portfolio.
Get A Management Agency In Philadelphia
If any of the above Philadelphia property regulations make you a little nervous, HubKey Property Management can help.
We’re comfortable working with you as your local management agent, or we can take over managing your Philadelphia property from A to Z.
Call today to learn more about Philly rental laws or to find out how HubKey makes owning Philadelphia property easy.
