Philly LANDLORD Advice needed...

[Angie Williams]

I have been investing in Philly for a couple of years now, and never had any issues until this one recent rental. I received a violation in the mail stating I needed to obtain a rental permit and license for this property I rent out in order to have tenants. If I do not comply I will be fined continually until I do so. Mind you this one inspector just doesn't want to leave me alone, any chance he gets he gives me a violation. Anyways, my question is how did the inspector even know they were my tenants? They are two young brothers that could have easily been my brothers or even sons. Plus, they had only lived in the home maybe 2 months and I received the violation. I know how to get this violation lifted and how to get this permit and so on, but someone recommended me a tax consultant company. This company does all the permits and licensing for us rather then us having to do all the footwork downtown. She costs $150 for initially getting the permit/license for my rental. I'm. It fond of this way of going about it but my partner finds it to be the easiest way, seeing we live in NY. I personal will drive down there, like I do all the time and go to city hall and file. I'm a little weary on the whole idea of hiring someone to do this for me also. Any advice would be great, I'm from NY and we don't require rental permits. So, this is all new to me. Thanks.

[Ethan Giller]

@Angie Williams, Philly is a great market for rentals, but it is important to follow the regulations especially since Philadelphia judges have gotten much more strict in the last year or so.  As @Igor Avratiner mentioned, you can get the rental license online at eclipse.phila.gov for $50 per unit.  You'll first need a commercial activity license (same website).

However, what is also extremely important is that you get a Certificate of Rental Suitability:
https://secure.phila.gov/CRS-Onlinev2/

Without the commercial activity license and the rental license, you cannot file to evict a tenant.  But what's more, without the required suitability cert, we've seen judges in landlord-tenant court invalidate ALL RENT received during a tenant's lease term if the suitability cert was not provided.  That's right, even rent that was previously paid is due back to the tenant and is a judgment against the landlord - the theory is that without this it's not a legal rental and so the landlord is not legally due any rent.  Seems crazy but it's true.

We've also seen in court landlords lose requests for rent due to other regulations not being followed, like not providing the required lead certification (for children under 7).

Philadelphia landlord-tenant judges are very tenant friendly so as soon as you get a tenant who hires a lawyer, if you did not follow all of the regulations perfectly, you are at risk.

In terms of how the inspector knew you weren't following the regulations, I think that's the wrong question to ask - the right question is how can you make sure to "court-proof" your rental business.  I recommend learning all the regulations yourself or else hiring a property management company who can help walk you through the process.

There are a few hurdles to jump through but the city is making a great resurgence and there are still excellent deals out there so it's all worth it.  Good luck!