Posted on April 10th, 2022
Find below a complete transcript of this video.
What’s up fellow entrepreneurs. Today I wanna talk about onsite property managers and the pitfalls associated with these types of employees in California. But first as always, I’m an attorney, but I’m not your attorney. So please consult with an attorney of your choice for your specific legal question concern.
Okay. So if you own rental property in California, things are tough right now, especially if you purchase rental property just before the pandemic lockdowns chances are you bought high and now California, won’t let you even collect the rents.
It’s an, an insane system, but we’re dealing with insane legend, but that’s not the topic of this channel. We’re not a real estate channel.
Let’s talk about another hurdle that California has put in place for owners of rental properties in California, my fellow property owners, if you didn’t already know, California law requires that every apartment building with more than 16 units have an onsite property manager, an onsite property manager is a person who lives in the one of those residential units.
And every onsite property manager is an employee. And there’s no exceptions to that rule.
So this means that property owners must have workers compensation. Insurance must pay at least minimum wage must provide rest and meal breaks must pay overtime, must withhold all proper federal and state income taxes, as well as make payments for social security, unemployment insurance, and disability and insurance for their employees. And of course, follow in the other relevant employment laws in California.
So you’re not required to have an onsite property manager if you have less than 16 units. But if you do have an onsite manager that managers an employee, even if under 16 units, another pitfall may be work for reduction in rent.
Property managers often provide services to the property owner and change for a reduction of rent. This is a biggie. This causes a lot of problems. If as a condition of employment, the property manager must live at the place of employment. Then that property owner may not charge rent in excess of the values set forth under California law. All right, so let’s look at the specific rules.
Resident managers are employees not pent contractors of, of the owner or the management company. The current minimum wage for a resident manager is $14 per hour for each hour. Worked during 2022 overtime is paid at one and a half times.
The property manager’s hourly rate and must be paid. If the manager works more than eight hours per day, more than 40 hours per week, or more than six consecutive days in a row, just like any other employee.
If the manager is required to live at the property as a condition of employment, either by law or by the owner, then regardless of the number of units, the maximum monthly rent the manager may be charged is $790 and 67 cents for a single manager, 1000 169 59 for a couple.
There’s no minimum amount of rent that must be charged. If no rent is charged, then the free rent may be credited against the manager’s wages by up to two thirds of the ordinary rental value of the unit. But the credit credit is capped at 7 90, 67 for one manager and 1000 169 59 for a couple, in order to credit rent to a manager, the credit only applies if it is included in a written employment contract.
All right. That was a lot, but property owners beware. Okay. So until next time be productive.
