An employment relationship may involve more than an hourly wage, salary, or other monetary compensation. It may also include tangible benefits that raise additional and often complex considerations. One such benefit is employer-provided housing, which can present unique considerations for both employers and employees.
In De Paolo v. Rosales (2025) 118 Cal. App. 5th Supp. 1, the plaintiff landlord employed the defendant tenant as on-site resident manager of the landlord’s property. As part of the employment relationship, the landlord gave the tenant access to a manager’s unit to reside in during her employment. Thereafter, the landlord terminated the tenant’s employment and brought an unlawful detainer action to evict the tenant from the manager’s unit. The tenant did not leave. Instead, she alleged her employment termination was unlawful and “retaliation due to reports [she] . . . made against [the landlord’s] illegal business practices.” She asserted that she had continued to pay rent. The landlord sent the rent payments back to the tenant and filed the unlawful detainer action.
Ruling in favor of the landlord with regard to the unlawful detainer action, the trial court concluded that the tenant did not have an independent right of possession of the manager’s unit outside the context of the parties’ “Resident Manager's Agreement,” and her right to occupy the unit was dependent on the continuation of her employment as the on-site resident manager. The court went on to state that the tenant “would have a valid defense to the unlawful detainer action” if she could show that her employment termination was in retaliation for legal activities, but that she failed to satisfy her burden of producing sufficient evidence to establish such unlawful conduct. The trial court therefore entered judgment in favor of the landlord and against the tenant and related parties, and awarded the landlord possession of the premises.
The appellate court agreed. It noted that the “ultimate question” before it was “whether a terminated [on-site] resident manager’s continued occupancy of a premises belonging to her employer, that she was only permitted to occupy as part of her employment compensation, qualifies as a tenancy for the purposes of the [Tenant Protection Act (“TPA”)].” The court held that it did not. Rather, “[i]n order to qualify as a tenancy within the meaning of the TPA, the occupant’s occupation of the premises must be lawful. After [the tenant] was terminated from her position as [the on-site] resident manager, and the 30-day period established in the resident manager's agreement elapsed, her occupancy of the premises became unlawful.” The court also agreed that the tenant had not satisfied her burden to produce sufficient evidence to establish unlawful or retaliatory employment termination.
This is an important reminder for employers to work with legal counsel in drafting resident agreements for employees in order to clarify whether and to what extent the residency should be expressly tied to employment.
This legal update and any use of its information does not create an attorney-client relationship. Nothing contained on this website should be considered legal advice for any specific employer or employment situation. Consult legal counsel before taking any action as a result of information contained herein.
