Service-Charge Settlement When a Tenant Moves Out or a Unit Sells

Settling a service-charge account when a tenant moves out or a unit is sold goes smoothly when the building manager fixes one cut-off date, closes every open item on the unit up to that day and hands both parties a written final statement. Who owes which amount (outgoing tenant, landlord, seller or buyer) is decided by the lease, the building’s rules and local law, not by the manager’s judgement on the day.

Move-out day is a bad day for accounting. The van is waiting, keys are changing hands and nobody wants to open a spreadsheet. Yet that is exactly when someone asks whether this month’s service charge was paid, and a disagreement starts that can drag on for months. This guide is about the settlement procedure itself: the order of steps, the items that usually get forgotten, what changes when the unit is sold rather than re-let, what a clearance letter should contain and how building management software keeps the whole moment transparent. For the general split of running costs and capital costs between landlords and tenants, read our separate article on whether the owner or the tenant pays the building charge. Note: this is practical guidance, not legal advice; where there is a dispute, ask a lawyer or the competent local authority.

Why does a final service-charge settlement cause so many disputes?

During an ordinary year, a unit’s balance drifts up and down and nobody inspects it closely. A move-out or sale forces a final number, and every past vagueness turns into money. Typical causes:

• Memory instead of records: the resident remembers making a bank transfer months ago, but nobody ever confirmed or booked it.
• A blurry time boundary: the tenant left mid-month, and nobody agreed whether that month is charged in full or day by day.
• One-off levies that never reached the ledger: a share of a lift repair was announced in a chat group but never posted to the unit.
• A new counterparty: the buyer knows nothing about arrears, and the seller has already moved to another city.

None of this is about bad faith. It is an information problem, and a unit with clean records settles in minutes.

Tenant move-out settlement: a step-by-step procedure

The sequence below works for most buildings. Consider writing it into the house rules so every resident is treated the same way.

1. Early notice: ask residents to tell the management a few weeks before moving out or signing a sale. A settlement done on the evening of the move is almost always incomplete.
2. Agree the cut-off date: from this day on, costs belong to the new occupant or owner. Whether a partial month is charged in full or pro rata is for the lease or the owners’ resolution to decide; what matters is that it is written down in advance.
3. Close open items: pending payment receipts, one-off levies, approved late fees and fees for building facilities.
4. Issue the final statement: one statement for the unit listing every line up to the cut-off date, with a copy for the tenant and a copy for the landlord.
5. Collect the balance: record the payment and attach the receipt. If the landlord deducts the amount from the tenant’s deposit, that is between the two of them; the building only supplies the correct figure.
6. Issue a clearance letter: once the balance is zero, the manager signs a written confirmation (details below).
7. Register the new occupant: open a new record and keep the previous resident’s history intact.

Changes of owner and tenant: common scenarios compared

Each kind of change has its own trap. The “usually responsible” column is deliberately general, because the binding answer sits in the contract and the building’s rules.

If neither the lease nor the sale contract says anything about service charges, the manager should not act as judge. Handing an accurate statement to both sides lets them, or the competent authority, decide.

Checklist: items that slip through the final statement

• Bank-transfer receipts submitted by the resident but not yet approved
• Remaining instalments of an approved one-off levy that have not been issued yet
• Late fees that, under the building’s rules, apply to earlier months
• Fees for an in-house nursery, gym or pool the unit used
• A booking of the common room whose cost has not been posted
• Repair costs caused by damage from that particular unit
• Access cards, remotes or keys to shared areas still to be returned
• A forwarding phone number for any later follow-up

What should a building clearance letter include?

A clearance letter (sometimes called a no-dues certificate or service-charge confirmation) is issued by the manager or the board and states that a unit has no outstanding balance up to a specific date. In some transactions, the buyer or landlord asks for one before releasing a deposit or completing. A dependable letter contains at least:

• The unit number, the owner’s name and the name of the resident settling up
• The exact period covered and the cut-off date
• A reference to the attached final statement showing a zero balance
• Items deliberately excluded, for example “the next renovation instalment is the owner’s responsibility under the resolution of [date]”
• The issuer’s name, role, signature and the date of issue

A one-line “no debts” note without a date or an attached statement tends to create problems later rather than solve them.

How building management software makes the settlement transparent

The hard part of any settlement is reconstructing the past. When every unit’s account has lived in one system from the start, the final statement is just a report. P-Soft’s Hamkhoneh provides the following, according to the product’s feature list:

• Owner, tenant and staff records with ready-made filters such as debtors and good payers, so a unit’s status is visible before anyone leaves.
• Ownership and residency history for every unit; registering a new occupant does not erase who held the unit before.
• Statements ready to print or save as PDF, plus bank-transfer receipts confirmed by the manager, in every plan from Start.
• One-off charges, due-date reminders and late fees in the Pro and Elite plans, so unplanned costs reach the unit’s account separately from the monthly charge.
• Targeted text messages to debtors, owners or tenants and an internal secretariat with an archive of letters and minutes in Pro and Elite; the signed clearance letter can stay in the building’s archive.
• Separate roles for manager, accountant, owner and tenant, with the option to withdraw a specific permission from one person; review the outgoing resident’s access after the move.

Only the Elite plan lets property management firms run several buildings under a single login. Note that Hamkhoneh runs in Persian on the Iranian calendar and targets residential buildings in Iran. If past accounts sit in Excel or another program, P-Soft moves that data into Hamkhoneh, with the scope set in the contract. For everything else the product does, visit the Hamkhoneh overview.

A hypothetical move-out from notice to keys

Take flat 4B in an imaginary complex. The tenant gives notice three weeks before the lease ends.

1. Using the debtors filter, the manager sees one unconfirmed transfer receipt and an open instalment of a lift-repair levy.
2. The receipt is matched against the building’s bank statement and confirmed. Under the owners’ resolution, the lift instalment belongs to the landlord, so it stays off the tenant’s statement.
3. On handover day the cut-off date is recorded and the final statement is printed twice.
4. The tenant pays the last month’s charge. The manager signs the clearance letter and names the lift instalment explicitly, citing the resolution.
5. The new tenant is registered, and the unit’s history shows who held each period.

If the unit also carried older arrears, our guide to collecting overdue building charges covers the follow-up.

Mistakes that spoil a settlement

• Verbal sign-off: “we’re all square” without a statement and signature cannot be proven later.
• Overwriting the old resident: replacing the previous record with the new occupant leaves past payments without an owner.
• The manager playing judge: deposits and seller-versus-buyer shares are not the manager’s call.
• Ignoring future instalments: remaining parts of an approved levy must be assigned to someone in writing.
• Leaving the landlord out: the tenant’s final statement should reach the landlord too.

Frequently Asked Questions

From which date should a move-out settlement be calculated?

From the agreed cut-off date, usually the key handover. How a partial month is treated depends on the lease or the building’s resolution.

Who pays service-charge arrears after a unit is sold?

That depends on the agreement between seller and buyer and on local law. Ask the management for the unit’s statement before signing and record the outcome in the contract.

Who issues a building clearance letter?

Normally the manager or the board, dated and signed, with the unit’s final statement attached showing a zero balance.

Does Hamkhoneh keep the history of previous residents?

Yes. Ownership and residency history is stored for every unit, so adding a new occupant leaves earlier periods intact.

Which Hamkhoneh plan includes PDF statements?

Printable and PDF statements come with every plan (Start, Pro and Elite). One-off charges and late fees start with Pro.

To see residency history, debtor filters and a unit’s final statement in practice, see Hamkhoneh in action and book a demo.

Further reading

• What Is Building Management Software and What Can It Do?
• How to Choose the Best Building Management Software: A Buyer’s Guide (2026)
• Best Way to Manage Building Service Charges for Residential Complexes

Complete guide: building management software