Actually, it is not that simple!  Minimum wage laws have snagged unsuspecting landlords.  Many landlords reluctantly realize they must give up a unit to a Resident Manager because they have 16 or more units.

The next thought landlords often have is…  How much do I have to reduce the rent or how much work can I get from the Resident Manager?

Minimum wage laws change often but, currently the rate is $8/ hour.  Of course, overtime generally applies.  Therefore, the rental credit must be divided by $8/ hour.  So, an $800 unit would theoretically allow the landlord to demand 80 hours of work per month.  Life is not that simple for landlords!

The California Code limits the rental credit to the lessor of 2/3 of the rental value of the manager’s unit or $451.89 (Single Manager) or $668.46 (Co-Manager Team).  In reality,  the limits are always the lesser amounts.  Therefore, landlords are limited to a rent credit of $451.89 for a single manager or $668.47 for a co-manager team.

Applying minimum wage law to those credit limits…  A landlord can demand 56 .49 hours of work from a single manager or 83.56 hours from a co-manager team.  Managers must be compensated for any work above and beyond these hours.

It is wise to have a Resident Manager on an employment agreement limiting their scope of work and the number of hours they are to work in a month.

An apartment building in California with 16 or more units must have an on-site resident manager.  Cal. Admin. Code tit. 25, § 42.

If your building is more than 4 units and less than 16 units, then a notice must be posted on the building informing the public of the phone number and address of the owner or owner’s agent (Management Company).

This is the text of the code:

A manager, janitor, housekeeper, or other responsible person shall reside upon the premises and shall have charge of every apartment house in which there are 16 or more apartments, and of every hotel in which there are 12 or more guest rooms, in the event that the owner of an apartment house or hotel does not reside upon said premises. Only one caretaker would be required for all structures under one ownership and on one contiguous parcel of land. If the owner does not reside upon the premises of any apartment house in which there are more than four but less than 16 apartments, a notice stating the owner’s name and address, or the name and address of the owner’s agent in charge of the apartment house, shall be posted in a conspicuous place on the premises.