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Resident Manager Agreement and the Conditional License Agreement to Use Unit

June 04, 2020

On Site Resident Manager Agreement

In California, landlords are required to have a Resident Manager to live on site for a property with 16 units or more. This is covered under the resident manager agreement and the conditional license agreement.

In many situations, property owner may offer an employee with base salary for the Property Manager position and a free apartment unit for addressing after-hour emergencies. 

Therefore, it is highly recommended that an owner require the manager to sign a resident manager agreement and conditional license agreement to use the unit.

Resident Manager Agreement

In the Resident Manager Agreement, the first and also the most complicated part is wage calculation. The employee, indeed, is employed with two different and independent nonexempt positions, Property Manager at normal business hours and Resident Manager by living on site, with two separate hourly rates.

If the employee works any overtime hours, then the employee work time will be calculated based on the weighted average of those two different hourly wages per applicable law. 

Resident Managers on Call

When an employee is a hired as Resident Manager, he or she is on-call during his or her on-call hours.

This means he or she is free to leave the premises but required to respond to phone calls and return to the premises within a reasonable length of time. Responding to phone calls within 30 minutes and returning to the property within 1 hour are considered reasonable. However, on-call time is not a compensable work time.

The Conditional License to Use Agreement

When an employee is granted a license to use a designated unit as Resident Manager, it means the use is conditioned upon employment and there is no tenancy implied. If the Resident Manager is no longer employed by the employer, he or she will have to move out from the unit within a required period of time. 

Typically, employer shall give the employee 14 calendar days to move out and the employee may request an extension for additional 7 calendar days. However, employer doesn’t have to approve this request. More importantly, employer is not obligated to compensate or relocate employee or any authorized occupants.

The other essential part of the conditional license agreement is to assure that unit is not employment compensation. In other words, employee receives discount of 100% off the market value of the unit and he or she is not required to pay a license fee. 

If the employee is required to pay a license fee because he or she is not actively working due to leave of absence, they must pay the fee within the date and time stated in the license agreement. Regarding leave of absence, employer must clarify the meaning of “paid leave” and “unpaid leave”. 

Upon Termination as Resident Manager

It’s critical to point out that if the employee is unable to fulfill his or her job responsibilities as a Resident Manager, he or she will no longer be eligible for the discount of the unit.

Similar to a lease agreement, it’s key to confirm that the employee is responsible to pay for his or her utility services in the license agreement. The employee is also encouraged to obtain renter’s insurance since employer is not responsible for any losses and damages of employee’s personal belongings in the Resident Manager’s unit. 

Last but not least, make sure employee and any authorized occupants sign the license agreement to use the unit. Authorized occupants must provide their names, date of birth, relationship to employee and gender.

For employer, you must set the maximum number of occupants in the Resident Manager’s unit, which is aligned with occupancy standard set for the entire building. We also highly recommend owners having their attorney to review license agreement before executing it with their employee.

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