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Residential Manager Basics in California

Managing a residential complex, particularly one with 16 or more units, necessitates the presence of a dedicated resident manager. This individual, as an employee of the apartment owner, plays a crucial role in overseeing day-to-day operations and ensuring a harmonious living environment for tenants. The relationship between the resident manager and the landlord is formalized through a signed voluntary, written resident manager agreement.

Compensation for the resident manager typically takes the form of a rent reduction. This arrangement acknowledges the resident manager’s responsibilities and contribution to the smooth functioning of the property. It aligns the interests of both parties, fostering a sense of commitment and shared goals.

However, it is important to note that the landlord retains the authority to terminate and replace the resident manager, provided the decision is not based on discriminatory or retaliatory reasons. This ensures a fair and legal process for both parties involved. All proper notices must be served to the resident manager when termination is being considered, and the subsequent eviction process to accommodate a new resident manager must adhere to established legal procedures.

Resident Manager Responsibilities

The resident manager, in turn, is responsible for maintaining accurate time records and submitting them to the landlord. This ensures transparency and accountability in terms of the hours worked. Landlords must actively monitor this aspect, making certain that the resident manager does not exceed approved overtime hours without prior authorization.

In summary, the presence of a resident manager is crucial for the effective management of a 

In accordance with California Code of Regulations Title 25 section 42, apartment buildings comprising 16 or more units are mandated to have an on-site resident manager. Typically, this individual resides within the apartment building in one of its units. As per California’s employment laws, a resident manager is considered an employee and is entitled to compensation for their services, often in the form of rent reduction.

Resident Manager Compensation

The Industrial Wage Order No. 5 governs the permissible deduction that landlords can make from the rent, and this figure is adjusted in tandem with changes in California’s minimum wage. It is imperative to ensure that the resident manager’s compensation does not surpass the minimum wage credited for rent reduction, as exceeding this threshold may expose the landlord to potential wage and hour lawsuits.

Furthermore, landlords are required to establish a voluntary, written resident manager agreement for each resident manager. This agreement, signed by both the landlord and the employee, should be reviewed by legal professionals and updated to account for changes in rent reduction and rent increases.

Given California’s “At-Will” employment status, landlords possess the right to terminate an employee at any time, unless in violation of a written agreement or for an unlawful purpose, such as discrimination or retaliation. Resident managers can be terminated and potentially evicted under California housing laws and most rent control laws if the unit is needed to accommodate a replacement resident manager. Legal consultation is strongly advised before undertaking such actions.

Rule of Thumb

A cautionary note pertains to the common practice of hiring resident managers for additional handyman work. This setup may exceed the scope of resident manager duties and necessitate more hours than are offset by the rent reduction. If a landlord wishes to engage a resident manager in handyman tasks, careful consideration is required, as the individual may still be classified as an employee under AB 5. Resident managers undertaking such tasks without proper compensation may have valid wage and hour claims, encompassing minimum wages, overtime, meal and rest break premiums, itemized wage statements, and sick leave.