California requires properties of 16+ units to have an on-site resident manager. The manager lives at the property and handles first-line tenant issues, often in exchange for reduced rent.
The on-site manager is typically a tenant who receives reduced rent in exchange for handling tenant interactions, small maintenance, and after-hours access for the property. Required by California Code of Regulations for buildings 16+ units.
For LA multifamily 16+ units, the on-site manager arrangement is both required and often underdocumented. During pre-listing preparation, clarify the manager's compensation (reduced rent or cash), duties, and lease/employment structure. Inconsistent documentation is a common diligence issue.
From the Sterman LA Multifamily Glossary — defined the way a broker with $1.41 billion across 254 closed transactions actually uses these terms.
Michael Sterman, Senior Managing Director Investments, Marcus & Millichap.
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