Legal Question in Real Estate Law in California

Re: Rent credit for duties on site

I would say that if the tenant is given a rent credit for doing maintenance on his own unit, and probably pro-rata on common areas, this is a lease term and he/she is not an employee.

However, when the services extend beyond to involve general maintenance or 'assistant manager' duties on other than the tenant's own unit, then the tenant becomes either and employee or an independent contractor to the management. MOST TENANT-MANAGERS ARE EMPLOYEES.

A resident manager does not need a contractor's or real-estate license for work confined to the complex he/she lives in.

Separate rental and employment agreements are preferable unless the tenant-manager lives in a special, designated manager's unit. This allows the manager to be terminated while the lease is still in effect, and also helps clearly establish how much compensation is being paid for payroll tax purposes. The tenant-manager must be paid at least the minimum wage, and to prevent abuses there are major limitations on how supposed rent reductions can be treated. See Labor Code section 1182.8. Other employer legal obligations must be met, e.g. workers' comp. insurance.

A landlord is legally responsible for job-related acts and omissions of a tenant-manager, and therefore it is foolish for the landlord not to carry liability insurance covering employees, even though such insurance is not mandatory. In fact, landlord liability policies often either already cover one or more employees or can, by modifying the application on file and obtaining a rider, be extended to cover a tenant-manager at reasonable cost.