Many landlords hire resident managers for their apartment
building. But to make it work, requires writing a job description, thoroughly
screening prospective managers, and preparing a property manager agreement.
Here’s how to legally and effectively do so.
Determine the Resident Manager’s Duties, Schedule, and Pay
Here are the key issues you need to decide before you start
your search for a resident manager:
- The manager’s responsibilities. The
first question you need to ask is why do you want to hire a manager? Do you want someone to handle all the
day-to-day details of running your building, such as screening new tenants,
handling repairs and collecting rent? Or do you want the manager to have
limited responsibilities, such as doing minor repairs or showing vacant apartments
to interested tenants? Making a list of all the job duties you’re looking for
in a manager will make the hiring process more objective and will give you
ready standards to measure which applicants are most qualified for the job.
- Hours and schedule. Figure out whether you want the manager to be
full- or part-time and how many hours you anticipate the manager
working. Decide how many hours you want the manager to be on the rental
property or available by cell phone.
- Pay. You may pay an hourly wage, generally
ranging from $10 to $25 per hour, or a flat salary. How much you pay depends on
the manager’s responsibilities, the number of hours, time of day and regularity
of the schedule, benefits, and the going rate in your community. You can get an
idea how much managers are paid by asking other landlords or checking want ads
for managers. Offering slightly above the going rate in your area should allow
you to hire the best, most experienced candidates. And if you’re thinking give
someone reduced rent in exchange for management services (as opposed to paying
a separate salary or hourly rate), don’t—especially if your property is under
Screen Potential Resident Managers
Your screening process should include the following:
screening. When people contact you about the manager’s job, be prepared to
describe the responsibilities, pay and hours.
interviews with strong manager candidates. Limit your in-person interviews to
people who meet your job requirements. To avoid potential charges of employment
discrimination, ask everyone the same questions—such as “Tell me about your
previous jobs managing rental properties.” Don’t ask questions that are not
clearly job-related—for example, the applicant’s medical condition or religion.
Get a completed application (you can use the rental
application available on the Nolo site, and delete what’s not relevant).
checking. Talk with former employers or supervisors (ideally at least two
people) with whom the person held similar manager positions. Ask about the
applicant’s previous job
responsibilities, character and personality traits, strengths and weaknesses,
and reasons for leaving the job. Take your time and get all the information you
need to decide whether an applicant is the best person for the manager’s job.
check. Checking an individual’s credit history is especially important if
you want a manager to handle money. Before you order a credit
report, be sure you get the applicant’s consent.
Choose your manager carefully. If you don’t, and the manager
causes legal problems (for example, by injuring a tenant or stealing tenant
property), you may be legally liable. See Landlord’s Liability for a Manager’s Illegal Acts for
more on the subject.
Prepare a Written Property Manager Agreement
Once you’ve chosen someone to be your resident property
manager, and all terms and conditions of employment are mutually agreed upon,
you and the manager should prepare a written property manager agreement that
covers manager responsibilities, hours, and pay, and that can be terminated at
any time for any reason by either party. Nolo’s Residential
Rental Property Manager Agreement provides a sound written agreement
between landlord and manager.
Prepare a Separate Rental Agreement
In addition to a specific property manager agreement, it’s a
good idea to prepare a separate month-to-month
rental agreement that can be terminated by either you or the manager with
the proper amount of written notice, typically 30 days, required under state
law. See How Month-to-Month Tenancies End for details.
Meet Your Legal Obligations as an Employer
When you hire a resident property manager, you’re an
employer, and must comply wage and hour
laws, pay Social Security and payroll taxes, and meet other legal
obligations of an employer. If you hate paperwork, your accountant or
bookkeeper can probably handle this work for you. An alternative is to hire a
reputable payroll tax service.
Landlord’s Legal Liability for a Manager’s Illegal Acts
Depending on the circumstances, you may be legally
responsible for the acts of your property manager
Undecided About Hiring a Resident Manager?
In some states, you may not have a choice: California, for
example, requires a resident manager on the premises of any apartment complex
with 16 or more units, and New York City has similar requirements for buildings
with nine or more units. Check with your state or local landlords’ association
to see if your state requires resident managers and in what situations.
What About Property Management Companies?
If you don’t want (or need) to hire a resident manager, but
you want to delegate some landlord responsibilities, consider hiring a property
manager firm. This may be a good option if you own one or more apartment
buildings or live too far away from your rental property to be directly
involved in everyday details, such as responding to repair requests and
More Information on Managing Your Rental Business
For more details on hiring property managers and the
business of landlording, see Every Landlord’s Legal Guide, or,
(if your rental property is in California), The California Landlord’s Law Book: Rights &
Responsibilities. For useful information on hiring, managing, and
firing employees, see The Employer’s Legal Handbook.