Today I am providing a little advice on hiring a resident manager for your apartment building. If your building has more than 15 units, you are required to have an on-site resident manager. You want to make sure that you have a written agreement that details the duties involved and the compensation package. You want to make sure that you are creating an employment relationship and not a tenancy. You do not want your resident manager to end up with a rent controlled apartment in San Francisco and you don’t want that manager to stay in the unit should you fire him or have her quit. Instead of creating a tenancy with your resident manager, you want to make sure have a contract that gives them a license to occupy the unit.
Additionally, make sure you are in compliance with all state and federal wage and labor laws. A lot of property owners rely on a gentleman’s agreement with their resident managers and offer them a discounted rent or a free apartment in exchange for certain services. That’s a really bad practice. If you end up firing the resident manager, he could come back and claim he was working 18 hours a day and was not being adequately compensated for all his time.
To avoid any problems, you really need to have your manager submit a time card. The frequency is up to you; it can be weekly or bi-weekly or monthly. Just make sure they put something in writing that documents the hours they work. This way, there can be no disputes later on if your manager becomes unhappy and tries to maintain that you were not paying him for the hours worked.
Make sure you are paying minimum wage. If the resident manager gets a free apartment or a discounted rent as compensation, be aware that you can only use 2/3 of the fair market value of the apartment. Look at 2/3 of the fair market value divided by the local minimum wage rate and that will give you the maximum number of hours that your resident manager can work.
If you have a residential manager and you do not have a written employment agreement in place, or you are not getting regular timesheets, I suggest you consult with an employment attorney who is knowledgeable on this subject. Everything might be fine right now, but if you need to let that person go, you could be in trouble.
Please contact us at Gordon Property Management if you have any questions on this topic, or you’d like to discuss the property management services we provide.