Are you familiar with employment laws relating to resident managers?
Just because an onsite manager doesn’t punch in with a time card, they are still employees, making housing providers subject to a myriad of regulations.
At Bornstein Law, we like to say that suing housing providers can be more lucrative than being a personal injury attorney. And for bottom-feeding attorneys, business is good.
We often cite the example of an East Bay attorney who continues to churn out letters to landlords who summarily deny Section 8 tenancies. This ominous correspondence informs housing providers of their obligations under fair housing laws and attempts to coerce the ignorant landlord into a settlement or face a costly housing discrimination lawsuit.
Another type of lawsuit that has been proliferating throughout California arises when there are disputes between landlords and their resident managers.
What, exactly, is a resident manager? This is an ambiguous term under the law that includes a “manager, janitor, housekeeper, or other responsible person” residing on the premises.
Employment attorney Gary Gancchrow attributes the rash of lawsuits to three factors, beginning with the close bond that is formed between the resident manager and their owner. Whenever conflicts arise, it gets personal. Tempers flare and disputes get escalated.
Resident managers also tend to have an indelible bond with the property itself. For a resident manager who has overseen properties for years, it becomes all they know. They are emotionally tethered to the property and consider it as their baby.
Once the disgruntled manager calls an attorney, the friction takes on a life of its own. What a landlord thought was a disagreement or argument can quickly escalate into a lawsuit costing tens of thousands of dollars.
Labor laws surrounding resident managers are extremely complex, so mistakes are bound to be made. As if a heat-seeking missile, the attorney for the plaintiff will seek to find procedural errors.
We can relate. Whenever a landlord-tenant dispute arises, the tenant’s legal counsel (often provided for free) will identify flaws in notices. What landlords think are slam-dunk eviction cases can be disappointed to learn that there was some flaw in the notice, the service of the notice, or any number of requirements in the law that must be followed to the letter.
The employment attorney points out a phenomenon called “fee-shifting” statutes. When a resident manager sues the owner and prevails in the lawsuit, the plaintiff’s attorney can recover attorneys’ fees but if the landlord wins, they are unable to have the plaintiff pick up the legal bill. This is a powerful incentive for a resident manager to commence a lawsuit.
How to protect yourself from liability
Although we are not employment attorneys, we can make a few emphatic statements.
If you have an onsite manager, it is essential to have an ironclad written agreement. More importantly, abide by the written agreement.
Secondly, require that records are maintained that document the amount of time the manager has spent performing their duties. There is considerable litigation surrounding overtime, meal breaks, and rest breaks. This may not make much sense for a resident manager who works from home, but we have to be aware that because they are an employee, they are entitled to certain protections afforded to all.
That point is worth stressing. When our office administrator arrives at work, their hours are easy to track. They can clock in. It’s more unwieldy when it comes to resident managers who are on and off. They are frequently interrupted with, say, a request to repair a sink or responding to someone applying for an apartment. It is vital to create a culture of excellent recordkeeping and if there is any resistance on the part of the resident manager, landlords need to be insistent that everything is transparent.
This complicated topic is expounded upon in this video hosted by the Apartment Owners Association.