HOA & Service Charges: Does the Owner or the Tenant Pay?

In most places, HOA dues or service charges are legally owed by the unit owner to the association or building manager, not by the tenant. A landlord can usually pass some or all of that cost on to the tenant through the lease, but only to the extent the lease says so and local rules allow it.

“Who pays service charges, the owner or the tenant?” sounds like a simple question, yet it causes a surprising amount of friction between landlords, renters and building managers. The answer depends on three layers: the relationship between the owner and the association, the relationship between the owner and the tenant, and the type of cost involved. This guide walks through each layer, separates routine running costs from major capital works, and gives practical checklists for owners, tenants and managers. At the end, we show how a property management system can keep owner and tenant records apart so nobody argues about who paid what.

Please treat this article as general information, not legal advice. Rules differ between countries, states and even individual buildings. Always read your governing documents (bylaws, declaration, CC&Rs or lease of the building) and your rental agreement, and ask a qualified local professional when money or a dispute is at stake.

HOA fees: does the owner or the tenant pay?

Think of it as two separate contracts. The first is between the owner and the association: by buying the unit, the owner agrees to contribute to the shared costs of the building. The association normally has no contract with the tenant, so it looks to the owner for payment. The second contract is the lease between owner and tenant. That is where the landlord can decide to include the HOA cost in the rent, recharge it separately, or absorb it.

So even when a tenant hands the monthly amount to the manager directly, the legal responsibility toward the association often stays with the owner. If the tenant stops paying, the association will typically chase the owner, and the owner then deals with the tenant under the lease.

Running costs vs capital works: who usually covers what

Many disputes disappear once costs are split into two groups. Running costs come from using the building day to day. Capital costs protect or upgrade the asset itself and benefit whoever owns it in the long run. Common practice looks like this:

The table reflects common practice, not a rule. Some leases are “all-inclusive” and some regions restrict what a landlord may recharge, so check before assuming.

Special assessments and the reserve fund

A special assessment is a one-off charge raised when the association needs money for a large project or an unexpected repair. Because these projects improve or preserve the property, they are generally the owner’s cost. A tenant who signs a lease in the middle of a renovation programme should not be surprised by a capital bill unless the lease clearly assigns it to them.

The reserve fund is trickier. In buildings that roll everything into a single monthly fee, part of that fee quietly goes into savings for future capital work. A tenant paying the full fee may be funding the owner’s long-term asset. Good practice is for the manager to show how the fee is made up, so the landlord and tenant can agree a fair split.

Mid-lease changes: moving out, selling, or a unit standing empty

Ownership and occupancy rarely line up neatly with the billing calendar. A few situations come up again and again:

• Tenant leaves mid-month: agree in advance whether running charges are split by days or by whole months, and record the exact move-out date with the manager.
• Owner sells while a tenant stays: arrears normally follow the seller, but new charges belong to the buyer from the transfer date; a statement on that date avoids confusion.
• Unit sits empty between tenants: the owner typically carries the whole charge during the gap; some buildings apply different rules to vacant units, so check yours.

In each case the fix is the same: a dated record of who owned and who occupied the unit, and a clear statement at each change.

Checklist for landlords and tenants

1. Before signing, ask the manager for the current monthly charge and how it is calculated (equal share, floor area, occupants, parking and so on).
2. State clearly in the lease which costs the tenant pays: running charges only, or also special assessments and reserve contributions.
3. Give the manager the move-in date and contact details for both parties, so notices reach the right person.
4. Agree who receives notices about owners’ meetings and votes; tenants usually cannot vote on capital works.
5. At move-out, request a statement for the unit and settle any balance before the deposit is returned.
6. Keep copies of receipts. If a tenant paid part of a capital charge, credit it back at final settlement.

What building managers can do to prevent disputes

• Record every unit with a named owner and, separately, the current occupant.
• Label each expense as running or capital in the accounts and in meeting minutes.
• Issue capital costs as separate charges, not hidden inside the regular monthly fee.
• Send capital-works notices to owners and routine reminders to occupants.
• Keep a history of who owned and who occupied each unit, and when.

For more on dividing the monthly fee fairly, read our guide on how to calculate building charges, and for the governance side see the duties of a building board.

How property management software keeps owner and tenant records apart

Hamkhoneh is a building management system from P-Soft, built for Iranian buildings and complexes with a Persian-language interface. Even if you manage property elsewhere, its approach shows what to look for in any property management software:

• Separate profiles for owner, tenant and staff on each unit, with ready filters such as debtors or reliable payers.
• Ownership and residency history, so you can see who held or lived in a unit during any period.
• Distinct roles for manager, board, accountant, owner, tenant and guard; sign-in uses a phone number plus a single-use code sent by text.
• Printable statements that can be saved as PDF and handed to both parties at move-out.
• Clearly categorised income and expenses, which makes it easy to explain what part of the fee was routine.
• Ad hoc charges for unexpected costs, issued apart from the automatic monthly charge (Pro plan and above).
• Targeted SMS to owners or tenants (Pro and above), so capital-works notices reach owners while routine reminders reach residents.

Frequently Asked Questions

Does a tenant have to pay HOA fees?

Only if the lease says so. The association normally bills the owner, who may pass the cost on through the rental agreement.

Who pays a special assessment in a rented unit?

Usually the owner, because it funds major repairs or improvements. A lease can say otherwise, so read it carefully.

Can the HOA chase a tenant directly for unpaid fees?

In many places the association’s claim is against the owner. Some local rules give extra remedies, so check your governing documents.

Are reserve fund contributions a tenant cost?

Generally not, as they save for future capital work. Ask the manager to show how the monthly fee is made up.

Is Hamkhoneh available in English?

Hamkhoneh’s interface is in Persian and designed for Iranian buildings; contact us to discuss your needs.

Want owner and tenant accounts that never get mixed up? Explore Hamkhoneh property management and get in touch with the P-Soft team.

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