Do You Need a Business License to Rent Out a House in El Segundo? (2026)

Published July 15, 2026

Yes. El Segundo requires a Property Rental and Lease business license under Measure BT, with rates now adjusted for inflation each year.

Yes. If you rent out a house, condo, or apartment unit in El Segundo, you need a business license, filed under the city's Property Rental and Lease category. This applies whether you self manage or hire a property manager. El Segundo voters approved Measure BT in November 2022, and the updated ordinance took effect January 1, 2024, replacing decades old flat fee rules with a system that adjusts every year for inflation.

The rule: every rental is a business in El Segundo's eyes

El Segundo Municipal Code section 4-1-12 requires anyone doing business in the city, including owning and renting real property, to register and pay a business license tax (BLT). The code spells out that a new business must file its registration application within the first five days of activity, and the fee basis can be calculated on square footage, number of units, or other measures depending on the business category. For landlords, the operative category is Property Rental and Lease, which the city's own guidance says covers commercial and industrial property owners as well as residential and apartment rentals. In plain terms: a single family rental home, a duplex, and a small apartment building all fall under the same requirement. There is no carve out for "I only have one rental house."

This is not unusual among South Bay cities. Most require some form of business registration or rental license for landlords, though the fee structures and thresholds differ block to block, which is exactly why owners with properties in more than one city get tripped up.

What Measure BT actually changed

Before Measure BT, El Segundo's business license tax structure dated back to the 1960s and 1970s and had gone stale. Measure BT modernized the ordinance, and two changes matter most for owners:

1. Annual CPI adjustment

Rates under the revised BLT schedule now adjust each year based on the Consumer Price Index, rather than sitting fixed for decades. That means the dollar amount you paid last year is not a safe assumption for this year. Budget for a small annual increase and confirm the current rate before you renew, rather than paying last year's number out of habit.

2. Renewal timing and enforcement

The city renewed its outreach around registration compliance alongside the rate change, which means enforcement attention on unregistered rental activity has been higher since 2024 than it was under the old ordinance. If you inherited a rental property, bought one from an owner who was self managing, or simply never registered when you started renting a room or an ADU, this is the year to check your status rather than assume no one noticed.

How this differs from a rental inspection program

A business license is not the same thing as a systematic rental inspection program like the City of Los Angeles runs under its Systematic Code Enforcement Program, which charges an annual per unit regulatory fee ($67.94 per unit as of the rate set in 2022) tied to routine building inspections of two or more unit properties. El Segundo does not operate a SCEP style program. Its Building and Safety Division and Code Enforcement Section instead work on a complaint and permit driven basis, meaning inspections are triggered by tenant complaints, permit applications, or visible violations rather than a scheduled citywide sweep. Do not confuse the two. Paying your business license tax does not trigger a proactive city inspection of your unit, and the absence of a SCEP style fee does not mean the city has no standards to enforce.

What this means for you

If you own a rental in El Segundo and have never filed a business registration for it, do that first, before anything else on your compliance list. It is a small filing with a real, if modest, annual cost, and the risk of skipping it (back taxes, penalties, and a paper trail problem if you ever sell or refinance) is disproportionate to the hassle of registering. If you already have a license, check that the rate you are paying reflects the current CPI adjusted schedule rather than a number you have been carrying forward unchanged since before 2024.

If you would rather not track annual rate changes and renewal deadlines yourself, that is part of what we handle for owners at Schofield.

This is general information, not legal or tax advice. Confirm with a licensed professional or the El Segundo Business Services Division before you act.

Sources

1. El Segundo Municipal Code 4-1-12, Business License Application; Basis for Fees
2. City of El Segundo, Measure BT
3. City of El Segundo, 2024 Business Tax & Renewal Fees Update
4. Ballotpedia, El Segundo Measure BT, Business Tax Measure (November 2022))
5. City of El Segundo, Business Tax Registration
6. City of Los Angeles Housing Department, Systematic Code Enforcement Program

Last verified: July 2026.

Topics: compliance, business license, El Segundo, Measure BT, landlord requirements

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Schofield Properties is a family run property management company at 323 Richmond St, El Segundo, CA 90245. We have managed the South Bay since 1972 and personally oversee about 186 doors today. Book a call to talk about your property.