Resident (On-site) Managers – Part 3

Resident (On-Site) Managers – Part 3

This article is the third of a 3-part series regarding resident managers, the first part having appeared in a March issue and the second part having appeared in a May issue of the Weekly Newsletter. Resources for detailed discussions of the subject are found at the end of this article.

Actions, Dress, and Grooming

The resident manager represents you and your property. Accordingly, you have a significant interest in ensuring that you and your property are well represented.
Actions – During the job interview, pay attention to the applicant’s language, tone of voice, and vocabulary. If you have concerns about the applicant’s speech and manner, the chances are that your tenants may have the same concerns. Appropriate actions are a part of good customer service to attract and retain good tenants.

Dress & Grooming

The first impression is an important impression. What you see may be what your tenants see. Is it the impression that you want for your business? Common sense and experience says we can tell something about people by the way they dress, or don’t dress.

Impressionable Tenants & Applicants

It is not just that a resident manager is considered a reflection of the owner or the management company, but the manager is also a reflection of the type of person who will occupy the project, maybe the neighbor in the adjacent unit.

Reports

Resident managers are on the premises for the operation of the property. The owner or property management company should closely monitor resident managers, but not try to perform the tasks assigned to them, as this will result in duplication of effort and a waste of time and money. 

Reords from on-site should provide the home office with a continuous and graphic record of exactly what was done each month and when it was done.  Rather than stand over the manager’s shoulder for specific tasks, let the records show how efficient the manager is and indicate what actions to take to improve efficiencies and provide warnings to take action in time to avoid serious problems.

Supervision
Protect Tenants & Others

Some of the negligent hiring issues discussed earlier are of particular concern regarding resident managers. Tenants and others can be harmed in many ways by a careless or dishonest resident manager including the following:

• Personal injury (including discrimination)

• Physical injury to other tenants or the general public

• Property damage or loss

Personal Injury – This is injury resulting from things such as slander or libel or from unfair discrimination.

Physical Injury – You have to ensure that the property manager does not cause physical injury either directly or indirectly.

Property Damage or Loss – Damage or loss can occur through careless or negligent action or through criminal activities on the part of the manager or individuals under the manager’s supervision.

Protect Your Money

There are a number of ways in which you can lose some of your money because of the resident manager including the following:

• Theft of rents

• Theft of property

• Personal use of accounts

• Damage to residence

Theft of Rents – It is possible that rents that are collected by the manager become “lost” prior to deposit in a bank account or delivery to the owner or the management company. In this case, it is not legal to require reimbursement by the manager unless so ordered by a judge after a successful prosecution for theft or conversion.

Even though cash rents are most at risk of being “lost,” it is possible for checks to be fraudulently converted after theft.

Theft of Property – Although property theft is usually not as much a problem in management as for many retail businesses, it can be an issue. Theft will most usually involve losses of maintenance equipment and supplies, office machines and supplies, or unit appliances or furnishings.

Personal Use of Accounts – If managers have use of property trade accounts or credit cards, receipts and invoices must be required and account statements must be carefully examined each month. Irregularities should be dealt with immediately upon discovery.

Damage to Residence – It is possible that an otherwise qualified manager is not a good tenant. This risk is minimized by following adequate screening procedures, the same procedures that should be utilized for any tenant. Occasional inspections of the manager’s unit, formal or informal, should be made.

Protect Your Applicants/Tenants

Resident managers, particularly if performing screening, have access to applicant information that could facilitate identity theft or other fraud against applicants or tenants. Even when the manager only collects submitted applications and forwards them to the owner or management company, a lot of each applicant’s personal information becomes available to the manager. You must ensure that federal, as well as any additional state requirements regarding safeguarding of personal data are rigorously followed. The least risk results when the manager only hands out the blank forms and information packages, with the completed applications being submitted directly to the owner or to the management company office.

Insurance

There are additional insurance issues that require consideration when a landlord employs a resident manager.
Workers’ Compensation Insurance – As was discussed in Part 1, resident managers must be classified as employees rather than independent contractors. Accordingly, landlords must provide workers’ compensation insurance coverage for the manager as for any other employee.

Liability Insurance

There are three important categories related to liability insurance. One is bodily injury, another is personal injury, and yet another is damage to property of others. Discussions of these and other risk issues were provided in Part 1.

Auto Insurance

Be sure that you require the manager to have motor vehicle insurance with at least the minimum coverages required by your state’s law, preferably much higher. Also, require that you be named as additional insured and are provided written proof thereof. You should also be sure that your landlord insurance includes non-owned auto coverage. This coverage is not in lieu of the resident manager having insurance on his/her vehicle, but it is back-up to his/her insurance.

Quitting & Firing

The old saying that “all good things must come to an end” is true for good resident managers. Good managers eventually leave because they find better opportunities elsewhere due to their abilities. Unfortunately, bad managers also come to an end, sometimes unexpectedly when they simply disappear or when one must be immediately terminated (fired) because of some serious problem.

The impact of any reason for termination of the relationship depends on both the law (federal and state) and the employment contract.

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