On-Site Manager Rule

Am I required to have an on-site
manager for my 16-unit building?  There
is a resident who takes care of the building’s maintenance for me in exchange
for discounted rent.  Is this good

The short answer is “no.”  There is common misunderstanding about this requirement
in our industry.  The law that speaks to
this issue, 25 California Code of Regulations Section 42, states as follows:

“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 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.”

In essence, the 16 residential unit or more
buildings do not need to have a resident manager living on-site, but in many
instances the owner may want to have an on-site manager especially if the
property is large and requires many daily functions.  More commonly, however, a “responsible person”
will suffice, which typically consists of an existing tenant that is charged
with certain tasks such as (i) being the contact for all residents should an
emergency arise; (ii) having access to the utility room and building systems to
permit servicing or to perform emergency shut-offs; (iii) holding the master
key to address accidental lock-outs; and (iv) administering building repairs
with vendors.  Indeed, a responsible
person may simply act as the point-of-contact and not possess other significant
management functions.

Whatever arrangement you elect to pursue or have
otherwise inherited, please ensure that it is properly documented in a signed
writing.  For starters, you want a clear understanding
of the nature and extent of the person’s responsibilities.  Secondly, labor laws govern how managers and even
in most circumstances janitors, housekeepers, and other responsible persons are
to be compensated.  While offsetting rent
is oftentimes one manner of payment, both state and local law govern the amount
and extent of rent offsets.  State law
limits the maximum monthly rent charged to an on-site manager, and the San
Francisco rent law may deem a rent reduction to be permanent unless it is properly
documented in a signed agreement. 

Lastly, the Department of Building Inspection is
actively enforcing this law.  Violators
will receive a “Notice of Violation” and given a short time period to appoint a
responsible party.  In addition, DBI
takes the position that an owner owning neighboring buildings on separate lot
and block parcels must likewise engage separate responsible parties in each 16
or more unit building. 

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