Victory in Sight: SCRHA Sponsors AB 1771 to End Outdated Resident Manager Mandate
Victory in Sight: SCRHA Sponsors AB 1771 to End Outdated Resident Manager Mandate
By Pat Moran, Aaron Read & Associates (SCRHA’s Advocate in Sacramento) and Molly Kirkland, SCRHA Director of Public Affairs.
SCRHA is thrilled to announce a major milestone in our multi-year effort to modernize California’s property management laws. Assemblymember David Alvarez has officially introduced AB 1771, a bill that would finally eliminate the burdensome requirement for an onsite resident manager at properties with 16 or more units.
A Regulation Without a Reason
For decades, housing providers have been tied to a rule with mysterious origins. After extensive research, SCRHA discovered that this was never a law passed by the legislature, but rather a regulation buried within the Department of Housing and Community Development (Title 25, Section 42).
While the reasoning behind the original rule remains unclear, one thing is certain: California is the only state in the nation with such a requirement. In an era of instant communication, the mandate is a relic of the past that has failed to keep up with the times.
The Compliance Minefield
The current regulation doesn't just mandate an onsite presence; it creates a complex legal and financial burden for owners. Under Industrial Wage Order No. 5, compensating resident managers is notoriously difficult:
- The "Rent Credit" Trap: You can only use a rent reduction as compensation if you have a properly drafted written contract. Without one, the consequences are draconian: the state may refuse to recognize the rent credit, leaving you liable for unpaid wages, liquidated damages, and heavy penalties.
- The Wage Cap: Even with a contract, the law caps how much rent credit can be applied toward wages.
- Check Exchange Complexity: While a "check exchange" allows for higher rent charges (up to two-thirds of market value), it requires a delicate administrative process where wages and rent are kept entirely separate.
The Solution: AB 1771
With modern technology, property owners and managers are now accessible 24/7 via text, email, and phone. AB 1771 is a "common-sense" fix that would:
- Prohibit state or local entities from requiring a manager or caretaker to reside on-site.
- Mandate the Department of Housing and Community Development to update its outdated regulations.
How You Can Help
This bill is simple, yet its impact on your operations will be significant. As AB 1771 moves through the legislative process, we will provide opportunities for you to voice your support.
In the meantime: If you see Assemblymember David Alvarez in the community, please take a moment to thank him for championing this vital legislation for the housing industry.
About David Alvarez: Assemblymember David Alvarez was elected to the California State Assembly in June of 2022 to represent the 80th Assembly District. The 80th Assembly District includes the communities of Barrio Logan, Logan Heights, Sherman Heights, Bonita, Lincoln Acres, Otay Mesa and San Ysidro, along with the cities of Chula Vista, National City and Imperial Beach. Prior to being elected to the Assembly, Alvarez has been a small business owner and has served for over fifteen years in government, including eight years as a San Diego City Councilmember. David was born and raised in Barrio Logan. David and his wife Xochitl, a lifelong educator, are raising their daughter and son in Logan Heights, the community they grew up in. https://alvarez.asmdc.org/