Q&A: Hiring Resident Property Manager

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Question:

I’m planning on hiring a resident property manager for my small apartment building. What type of paperwork do I need?

Answer:

For many landlords, hiring a resident manager to handle day-to-day details of your rental property has many benefits—not the least being that an on-site manager will free you from many of the time-consuming (and tiresome) aspects of landlording, such as dealing with late-night repair requests. And in some states, you might not have a choice as to hiring a resident manager. California, for example, requires a resident manager on the premises of any apartment complex with 16 or more units. New York City has a similar requirement for buildings with nine or more units.

But hiring a resident manager can mean some headaches, too, such as lots of paperwork associated with the following tasks:

  • Finding, screening, and hiring an employee.  All likely resident manager prospects should complete a job application, and you should follow up by checking references and credit history, as well as criminal and driving records.
  • Preparing a written agreement with your resident property manager. Once you’ve chosen someone, you should prepare a clear written agreement that spells out the resident manager’s job responsibilities (handling repairs, collecting rent, screening tenants?), hours, schedule, pay, and other important terms. For a quick and easy way to do this, check out Nolo’s Residential Rental Property Manager Agreement.
  • Complying with your legal obligations as an employer, such as paying minimum and paying Social Security. One good resource is IRS Publication 15 (Circular E), Employer’s Tax Guide,  which provides details about your tax and recordkeeping obligations when you hire an employee. You can handle the paperwork yourself, or have someone else (your accountant or bookkeeper or a payroll service) do it for you.

For detailed information on the legal and practical issues of hiring a resident property manager, see Nolo’s book Every Landlord’s Legal Guide.

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