Resident Park Managers

for a smaller park (20-30 lots), where you have a tenant act as park manager:

Do you give them a 1099?

What responsibilities do they have? Do they typically do everything? Or just the minimum like collect rent, post notices, ect.

In NC a person doing property management for another person must be a licensed agent. Does this apply to MHPs?

Alright first off I am not a tax accountant. I used to work for a Big 4 accounting firm and my wife is a CPA. I do our taxes. In short, I have zero credibility whatsoever on this topic.

With that out of the way the short answer is no you do not give them a 1099 unless you’re paying them cash > $600 per annum on top of the free lot rent. Why? Because it’s on premises and exempt by the IRS: https://www.irs.gov/publications/p525/ar02.html. Search for lodging. If one wants to argue that lot rent is not lodging then it gets even fuzzier since this is basically a trade to let personal property sit on your business premises in exchange for part time (or volunteer?) property management services.

Generally you want this person to do as little as possible. You will see threads on here about managers stealing rent during collection. Make an effort to have the tenants pay you directly. There are some recent great threads on methods Park owners use to do this. In general you want them to be your eyes and ears for the Park, read meters / submeters, assist with meeting contractors for home rehabs and make ready.

For one time activities like selling a home where they have to field phone calls, put out bandit signs, show the home, get the paperwork in order, etc then there is a one time bonus of like $500 or $1,000 per home. Only really good managers can do this, and you may have to get creative to do it effectively for a small Park.

We pay our managers with a payroll service. This keeps things very clear for workers comp- they are an employee, and therefore they are covered if/when there is an issue. This is what our CPA and attorneys have advised.

If your state requires the property manager to be licensed, do the small mom and pop parks have their resident managers get licensed? Or does this not apply to parks?

The onsite manager is a employee of the owner. You do not need a licence to manage your own parks, just ones you do not own.