Business License For Rental Property - Alameda County

jadonNovember 15, 2007

I have two properties (single family) in California, Alameda County and have just been informed that I am required to have a business license in order to rent the properties.

I was never notified nor have I ever heard of this tax assessment and now have to pay license fees and penalties retroactive for all years that properties were rented.

Is there a law that requires the City & County of Alameda to notify landlords of this assesment? Can I fight this?

Any advice would be appreciated.

Thank you for reporting this comment. Undo
davidandkasie

i don't know about CA, but here it is 100% the LL's responsibility to make sure every thing is up to code, INCLUDING making sure that teh properties are on the tax roles as rentals and that the LL has the proper license.

if the law took effect after you started renting the properties, they would have had to advertise it locally and give an effective date. if it took effect prior to your becoming a LL, then you should have checked into things a little closer.

    Bookmark   November 15, 2007 at 10:01AM
Thank you for reporting this comment. Undo
janea

Could you call an attorney to determine the answer to your questions? Perhaps an argument could be made that you should not have to pay the penalties, though I have a feeling you will be liable for the back taxes at the least. I think with a single family dwelling the government really has no way of determining your property is a rental, therefore notifying you would be impossible, unless I'm missing something?

    Bookmark   November 15, 2007 at 10:24AM
Thank you for reporting this comment. Undo
mariend

DON'T DUE IT, until you check with the Attorney General of that county. We had rentals in CA and never had to get a license. Who notified you? If you cannot get a satisfactory answer, go to the Attorney General of Calif. Remember, this is the bay area and many times they do thing just above board, until they get caught. Make them show you the law in their book, and I don't think they can go back years. Taxes yes, licenses, no! Check with RE offices that handle rentals--a single person renting cannot be made to pay these fees unless all corporations and others pay and I do believe you have to be notified in writing and these fees must be published in the paper. Don't let some "jerk" try to get money from you. Just tell them you have to check with your attorney and the RE commissioner in Sacramento. Be polite, firm and document all phone calls who, when what was said and if there were any "causal" threats.
Let us know
Hugs and good luck

    Bookmark   November 16, 2007 at 4:19PM
Thank you for reporting this comment. Undo
mariend

Also I do not think you need any landlord needs a license to rent only 2 houses. We never did.

    Bookmark   November 16, 2007 at 4:21PM
Thank you for reporting this comment. Undo
janea

In know that in Santa Barbara County one does need a business license and must pay the tax annually. This is true for all rental properties, from single family dwellings to large commercial properties. It is a law, and as the old saw goes "ignorance of the law is no excuse". The OP is in a different county, but chances are good the laws are quite similar.

    Bookmark   November 16, 2007 at 6:19PM
Thank you for reporting this comment. Undo
triciae

Well, rather than guessing I checked the Alameda County website. It says that, yes, if you are a LL in unincorporated Alameda County you need a business license. If you are within the City of Alameda you should take a look at their website.

/tricia

Here is a link that might be useful: Alameda County Business Licenses

    Bookmark   November 16, 2007 at 6:25PM
Thank you for reporting this comment. Undo
mariend

The way I interpreted this is only if you as a LL were leasing out a residential or business. I did not see anyplace about renting, but then I probably missed it. I did ask our tax person (CPA) in CA (Los Angeles County) about license, and she said no unless it was an apartment or over so many single dwellings. The only thing I can suggest it talk to your tax person and your lawyer.
I cannot imagine every one who rented out one or two home having to get a business license or they insisting you go back to when you started.
Good luck

    Bookmark   November 16, 2007 at 8:05PM
Thank you for reporting this comment. Undo
brickeyee

Lawyer up.
You are not in the leasing business.
You do not find tenants for hire for other property owners.

Sounds like a little 'creative' interpretation to squeeze $$.

    Bookmark   November 17, 2007 at 9:24AM
Thank you for reporting this comment. Undo
bethesdamadman

You are not in the leasing business.
You do not find tenants for hire for other property owners.
Sounds like a little 'creative' interpretation

Uh, no.....I think it is you with the creative interpretation. ;-)

Most municipalities require landlords to obtain business licenses. Now, some municipalities have different thresholds and exempt "small" landlords. For example, where I live in Montgomery County, MD, every landlord needs a license unless the property is also owner-occupied and the owner is only renting out a room or two in his own house. However, if you rent out three rooms then you must obtain a license to be a landlord.

I'm not going to bother to google California real estate law, but I have no doubt that if the OP has two distinct single family rental properties, then a license would be required. I only hope for his sake that he has been claiming the income on Schedule E of his Federal 1040, because Alameda County may have reported him to either the state or IRS for possible income tax evasion since they already know that he has been surreptitiously (either knowingly or unknowingly) operating as a landlord and has evaded paying county fees.

    Bookmark   November 17, 2007 at 12:34PM
Thank you for reporting this comment. Undo
ddlkmm

Most Landlord do not meet the 500 hours pro test for business and do not have any trade activity character of business. Rental income is passive income, not business income.

Therefore MPMC 5.12.043 Commercial Rental Business should not apply to All Landlords in the City.

Licenses Required for Some Businesses in Los Angeles california
http://www.lacounty.gov/wps/portal/!ut/p/b0/04_Sj9CPykssy0xPLMnMz0vMAfGjzOJNvVw8TMx9DAwMzJ1cDIx8DDxCjR1DDA2cjfQLsh0VAR8ETWE!/
Not all businesses must apply for licenses to operate in unincorporated areas of the County. Generally, a business is required to be licensed if it is subject to County health or safety regulations.
WHAT YOU NEED TO KNOW BEFORE APPLYING FOR A COUNTY BUSINESS LICENSE

Californians can pursue class-action lawsuits against cities and counties if they were charged an illegal local tax
http://ivn.us/2011/07/27/california-state-supreme-court-allows-class-action-lawsuits-against-illegal-local/

http://city.udn.com/62934/4900017

Here is a link that might be useful: http://city.udn.com/62934/4900017

This post was edited by ddlkmm on Wed, Dec 12, 12 at 13:43

    Bookmark   December 12, 2012 at 1:39PM
Thank you for reporting this comment. Undo
brickeyee

"Most municipalities require landlords to obtain business licenses."

Not so.

Most LLs do not qualify as being in "business" of leasing.

    Bookmark   December 13, 2012 at 11:26AM
Sign Up to comment
More Discussions
Pond Dye Dumped Into My Pond and Stream... Water Rights Question
I never posted once in seven years, and now I post...
ncrealestateguy
Would you buy a home near fire station??
We're considering an offer on a single-family home...
1232
Figuring out who is a good Real Estate Broker?
I want to explore the market right now and get out...
prairiemoon2 z6 MA
An offer to purchase when house not on the market
This has not happened yet, but I want to be prepared. Our...
belfastbound
Sell Home, Go to Court Or What?
This may be the first time I have posted asking for...
ncrealestateguy
People viewed this after searching for:
© 2015 Houzz Inc. Houzz® The new way to design your home™