Redbook Blues: Personnel Challenges

by Michael Payne, Allmark Properties, 2018-2019 Government Affairs Committee Chair

As a multifamily owner/operator, I’ve learned two critical management skills:  1) people do strange things; and 2) the less time that bosses and employees spend on human resources issues, the more time they both spend doing their jobs.

From onsite office and maintenance technicians to regional and corporate-headquarters staffs, the multifamily industry is a very labor- intensive industry.  From healthcare costs to W-2s and job classifications to termination procedures, dealing with human resource challenges and employment laws can be overwhelming and time-consuming.

The good news is the REDBOOK is an excellent resource for Texas multifamily professionals dealing with employment concerns.  Many AATC members use the REDBOOK to help with routine landlord-tenant issues and concerns, but it also contains practical, user-friendly information on employment law.

Navigating the challenges of employees living on-site is one of the multifamily industry’s unique human resources issues.   It is especially tricky when an employee living at the property is terminated. At a minimum, be sure that all employees living on-site:  1) complete an employment application; 2) sign a TAA Lease contract; and 3) use special provisions or lease addendum regarding employment.

According to labor attorney Jim Kizziar, one of the biggest employment-related mistakes that our industry makes is not having all employees fill-out an employment application.  The industry screens potential tenants more than potential employees.  Make every job applicant from CEO to porter fill-out an employment application.

Kizziar recommends requiring employees living on-property to sign a TAA Lease before moving into any on-site apartment unit.   He recommends that the lease should clearly state that the employee’s right to live there exists only as long as he or she is an employee of the owner or management company.  If there is no security deposit or the rent is free, then Kizziar recommends putting “zero” in those particular lease blanks.

Most importantly, Kizziar advises that all employee-leases include an addendum or insert a clause in the special provisions section (paragraph 10 in the lease) which enables management to immediately require an employee who ceases employment through termination or resignation to move out of the apartment community. This addendum or clause should also require the employee to be liable to pay rent if he or she does not move out right away after employment termination. The clause could be similar to the following:

We may terminate this lease with 24 hours notice in the event your employment with owner or owner’s management company for this apartment community is terminated for any reason, including but not limited to dishonesty, misinformation in your employment application or unsatisfactory work performance. In the event of such lease termination, you will pay holdover rents in the amount of $__________ per day in advance, beginning one day after you are required to move out. If your employment is terminated, you will no longer have any rights to use the utilities, telephones, equipment or other facilities owned or controlled by the owner or management, and we will have all rights and remedies under this lease, including statutory lockout, landlord’s lien and utility cutoff as allowed under the lease.”

To mitigate any potential problems arising from termination, Kizziar advises apartment owners and operators to document any poor performance, misconduct or violation of policies, rules or procedures in the employee’s personnel file and give the employee warnings of such performance deficiencies or policy violations. When it comes to post-employment lawsuits, Kizziar cautions that the employer may lose unless there is good documentation.  Bottom-line, when an employee they screws-up, put it in writing.

Finally, Kizziar counsels speedy, no-hassle departure of the terminated on-site employee.  Be sure to retrieve any of the employee’s office, apartment, storage, maintenance shops, and other keys. Also, if the fired employee has possession of any leases or other important records of the apartment community, such records must be retrieved immediately to avoid tampering, loss or destruction. If the fired employee continues to live at the community or if the employee’s access to keys or equipment continues, the employee could do a great deal of economic harm and public relations damage to the owner or management company. Therefore, it is important to have former employees “move on” immediately after employment has been terminated.

Bottom-line, use common sense and good judgment during the hiring and firing process.

Michael Payne, Allmark, is the AATC Government Affairs Committee Chair. For more information, contact Perry Pillow at ppillow@aatcnet.org.