Bluestone and Hockley Real Estate Services
Suppose you own a 40-unit apartment complex. You notice that the units are not renting very quickly, your vacancy rate is high, and for some reason your collections are very low. As you are auditing your year-end books, you discover that your on-site manager has been pocketing the laundry room machine income. As you dig further you find that rent money is missing. You decide to fire the manager.
You rummage through your files to find your manager agreement and find…nothing. Now you are stumped. It's midnight and you worry about it all night. In the morning you call your attorney and ask, “How do I fire these managers? Can I get my money back?”
The attorney will probably say, “Sure you can fire them; but will you let them stay on site?” You respond, “Of course not! I want them out”.
Oregon law provides for a 24 hour notice of eviction for on-site managers ( ORS 91.120) so you can give them written notice and they have to move. It may take a week to go through the court system if they are recalcitrant. The same section also says that you can move them out using the rules you defined in your written employment contract. The law reads that “A landlord”¦may only evict an employee”¦. after 24 hours following written notice of the termination of the employment or as set forth in a written employment contract whichever is longer.”
Luckily, you found out that you had problem managers. Maybe you could have prevented the problem with better screening? You definitely could have protected yourself better.
The place to start is with a written resident manager contact.
Define your priorities:
- Fill vacant units
- Represent the property in its best light
- Keep the grounds picked up
- Decide who will collect rent
- Maintain positive tenant relations
- Maintain effective communication with property manager and/or owner
- Check applications
Then describe your compensation package. Will the rent be free as part of the compensation package? What will you pay in cash? What will you pay for cleaning and painting of vacant units, and what was included in the base pay as far as hours expected for showing the vacant units, cleaning, painting, landscaping and office hours? Discuss the status of unemployment taxes and workman's compensation. Explain when payday is. Describe the hire date.
- Office hours
- Compliance with fair housing guidelines
- Repairs and cleaning responsibilities and commensurate pay
- Security regarding keys and rental agreements
- Inspect vacant units upon move out
- Show vacant units (keep vacant units clean, smelling fresh, and dusted)
- Be available to show units, take telephone calls, and set appointments with prospective tenants to show units
- ake applications, fill out rental agreements, renew leases, and check applications
- Splash pan replacement
- Toilet seats
- Light bulbs
- Smoke detector inspection and replacement
- Change locks
- Light bulbs
- Clean parking lot
- Patrol grounds for litter
- Clean laundry rooms
- Vacuum and dust hallways
- Supervise landscaping
- Keep inventory of all tools and supplies that belong to property
Once you have plotted out the nitty gritty of the job you need to address the details such as clarifying vacation details: how long and who will watch the property while the manager is gone.
Drug testing is an important part of your policy. You may want to run a criminal check and credit check on your future manager as part of the hiring process, just like you would for any tenant.
Cancellation of the contract
Managers can be dismissed for insubordination, fraud, conversion, lewd or violent behavior, drug use, failure to report, and/or failure to follow instructions. Be sure to explain that you have the right to dismiss the manager with 24 hours written notice.
Explain how the manager can resign, depending upon employment and/or residency.
Address what happens to the manager if the property is sold or if there is a change in property management companies.
Finally, you may want to define the walk through of the property when the manager is leaving. You will want to collect keys, check the rent collections, collect petty cash, walk through vacant units, review pending applications, perform an exterior walk through and check the toll and supply inventory.
Save yourself headaches
Having a written contract with your resident manager will save you from the headaches of having a relationship with someone that you cannot control. Remember that the manager controls the rental income of your property, the tenant selection and the condition of the property. They need guidelines from you. They need to know what you expect and what will happen when the relationship no longer works for the both of you. Setting the rules will insure a smoother running property and a better return for your investment.