The city of San Luis Obispo is targeting landlords who don’t have business licenses. Property owners who rent to tenants but don’t comply with the newly enforced regulation could face up to a $500 daily penalty after a month grace period.
The city will be sending out nearly 3,900 letters on Aug. 23 to suspected violators of the city ordinance. The letter will explain ordinances require property owners to obtain a business license if they’re going to rent out property. Rental owners who want to go legit will have to fill out a business license application and pay a $68 application fee. Home owners who make more than $50,000 a year from their rentals will pay 50 cents for every $1,000 in gross receipts.
The city discovered the 3,900 potential scofflaws by trawling through county property tax records and singling out owners who didn’t take a homeowner’s deduction. Such cases may involve a vacation home or something similar, but city officials say it’s likely most are used as rentals.
Unlike other cities in the county, San Luis Obispo requires landlords to have a business license, under an ordinance that’s been on the books since 1991.
The city collected $120,000 in business license fees from rental properties last year, and city officials anticipate they could nab $80,000 or more after the coming crackdown.