1. Unless you offer your manager an employment contract, you will be free to fire him at any time, with or without cause. This ability, known as “employment at will,” describes the situation for most employees. The only caveat is that employers may not fire them for discriminatory or otherwise illegal reasons.
But if employers have simply decided to hire somebody else, they can let the employee go without needing to justify the decision and without having to give advance notice.
2. Tenants are not so easy to get rid of, as you no doubt know. Lease-holding tenants are entitled to remain until the end of the lease term unless they have broken an important lease clause, committed illegal acts on the property, or severely damaged it. Month-to-month tenants can be terminated for the same reasons, and can be let go for no reason (unless the reason is illegal) on proper notice.
When dealing with a tenant-employee, you can see the possible collision: An at-will employee with a lease may be able to remain on the property if he loses his manager’s job but does nothing to justify losing his lease.
3. The way to avoid this unhappy event is to make it clear that you do not intend to create an independent landlord-tenant relationship. In the employment agreement, state that living on the premises is essential to the job. Make it clear that both you and the manager may end the employment relationship for any reason (that way, you’ll preserve the “at will” status of the employment), and that if the employment ends, so too ends the tenancy.
See Janet Portman’s feature, How to Negotiate a Lease Buyout.
American Apartment Owners Association offers discounts on products and services for landlords related to your real estate investment including REAL ESTATE FORMS, tenant debt collection, tenant background checks, insurance and financing. Find out more at joinaaoa.
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