Who Pays HOA Fees? Landlord or Tenant
If you rent or own a property in an HOA-managed community, you’ve probably wondered if renters pay the HOA fees or if it’s the landlord’s responsibility. These fees cover things like maintenance, landscaping, and shared amenities. But when a landlord rents out a property, it’s not always clear whether they should pay or pass the cost to tenants.
Some landlords automatically cover the fees, while others include them in the lease agreement for tenants to handle. The decision often depends on what’s written in the lease, local laws, and the specific rules of the HOA. If this isn’t clearly outlined, it can lead to unexpected disputes and a poor landlord-tenant relationship.
This blog breaks down how HOA fees work and who is typically responsible for them. We’ll review common rental agreements, key factors influencing payment responsibility, and how both parties can avoid confusion. By the end, landlords and tenants will know exactly what to expect when paying HOA fees.
What Are HOA Fees?
Homeowners Association (HOA) fees are obligatory payments that homeowners make to maintain shared spaces and services within a community. These fees cover landscaping, security, common area maintenance, and amenities like pools, gyms, and clubhouses.
An HOA is a governing body in charge of managing the community’s upkeep. It enforces rules, handles repairs, and ensures shared facilities are well-maintained. To fund these responsibilities, HOA collects fees from homeowners living in that neighborhood. The amount varies based on property type, location, and the level of services provided.
Condos and townhomes usually have higher fees than single-family homes. Condo HOAs also handle exterior maintenance, while single-family home HOAs focus on security and landscaping. Some communities charge additional fees for major repairs or unexpected costs.
If a landlord rents out a home in an HOA community, the lease should clarify who pays HOA fees—the renter or the landlord. Without clear terms, unexpected costs can cause problems for either side.
Who Legally Pays HOA Fees in Rental Arrangements?
State laws and lease agreements determine who pays the HOA fees when renting a property. In most cases, landlords remain legally responsible for these fees unless the lease explicitly transfers the obligation to the tenant.
The lease agreement serves as the final word in rental situations. Some leases contain clauses that clearly state the tenant must cover HOA fees. These agreements often apply to properties where tenants use shared amenities, such as pools and fitness centers. However, if the lease does not mention HOA fees, the responsibility remains with the landlord.
It should also be considered that laws regarding HOA fees vary by state. Some states require landlords to cover them regardless of lease terms, while others allow landlords to shift the cost to tenants. In places with tenant-friendly laws, landlords cannot demand additional payments beyond rent unless explicitly stated in the lease.
The HOA rules are also important in determining the paying party. Some associations prohibit landlords from passing fees to tenants, while others remain neutral. Therefore, landlords should verify HOA policies and state regulations before structuring a lease agreement. A clear agreement prevents misunderstandings and ensures both sides know what to expect.
Pros and Cons of Renters Paying HOA Fees
Whether tenants should pay HOA fees depends on the lease agreement and the specific rental situation. While some tenants benefit from handling these fees, others find them an unwanted obligation. Landlords and tenants must weigh the pros and cons to make the right decision.
3 Pros for Tenants
Paying HOA fees can give tenants more control over their living situation and access to community benefits. In some cases, covering these fees might even lead to lower overall housing costs. Here are some reasons why paying HOA fees could work in a tenant’s favor:
1. Full Access to Amenities
Tenants who pay HOA fees typically have full access to amenities such as gyms, pools, and clubhouses. However, some landlords may limit these privileges if they cover the fees themselves, making it preferable for tenants to pay directly for unrestricted access.
2. More Control Over HOA Rules
HOAs enforce regulations on landscaping, trash disposal, and parking. When tenants pay HOA fees, they often have a greater say regarding the community. This way, they can avoid fines or penalties due to miscommunication between the landlord and the HOA.
3. Potential for Lower Rent
Some landlords offer reduced rent if tenants agree to cover HOA fees separately. This arrangement can benefit tenants who prefer managing payments individually, offering more control over their expenses.
3 Cons for Tenants
While paying HOA fees has some benefits, it can also create financial and practical challenges for tenants. Costs may rise unexpectedly, and tenants don’t always receive the same rights as homeowners. Here are some potential downsides to consider:
1. Unpredictable Costs
HOA fees are not always fixed. They can increase due to community maintenance, repairs, or special assessments. Unlike rent, these costs fluctuate, making budgeting more difficult for tenants.
2. No Long-Term Benefits
Homeowners benefit from improvements funded by their HOA, which increase property values. However, tenants do not gain from these investments. Paying HOA fees may feel like an additional expense without any lasting returns.
3. Limited Tenant Rights
Some HOAs restrict tenant privileges even when they pay the fees. In certain cases, tenants may not have voting rights or access to community events. This can lead to frustration among renters who feel they are contributing financially but aren’t granted the same benefits as homeowners.
Pros and Cons of Landlords Paying HOA Fees
HOA fees cover shared property maintenance, amenities, and services within a community. There are benefits to landlords handling HOA fees, but this approach also has drawbacks. Recognizing both viewpoints can help landlords in making well-informed decisions.
3 Pros for Landlords
Covering HOA fees can simplify rental management and ensure compliance with HOA regulations. Many landlords prefer this approach to maintain better control over the property and avoid tenant disputes with the HOA. Some of the benefits include:
1. Simplified Payment Process
When landlords pay HOA fees, they prevent potential late payments or missed dues. This prevents penalties from the HOA and keeps the property in a good position. Managing these payments directly ensures that the fees are handled on time.
2. Better Control Over HOA Compliance
HOAs enforce rules regarding property maintenance, landscaping, and communal areas. By paying these fees, landlords maintain control over these responsibilities. This arrangement helps mitigate problems if tenants fail to adhere to HOA guidelines, thereby reducing the risk of fines or complaints.
3. Predictable Rent Pricing
This approach eliminates surprise costs for tenants by rolling HOA fees into a fixed rent amount, making total housing expenses predictable. For landlords, it ensures steady rental income without needing to adjust for fluctuating fees.
3 Cons for Landlords
While paying HOA fees offers control and convenience, it also comes with financial risks. Some landlords may find that covering these costs reduces their profitability or leads to tenant disputes. The downsides are:
1. More Financial Responsibility
Absorbing HOA fees adds to a landlord’s expenses. If these costs increase unexpectedly, landlords must either increase the difference or raise rent. This can impact profitability, especially if rental income does not offset the added expense.
2. Difficulty in Separating Costs
Some tenants expect landlords to handle all maintenance and community-related expenses if HOA fees are included in the rent. This can create confusion over what the HOA covers versus what tenants must maintain. Questions like “Does a tenant pay HOA fees for certain services?” can cause disputes if expectations are unclear.
3. Potential Rent Disputes
If HOA fees rise, landlords may need to increase rent to cover the difference. However, sudden rent hikes can discourage tenants from renewing leases.
Best Practices for Defining HOA Fee Responsibilities
HOA fees can be a point of confusion if lease agreements do not clearly define payment responsibilities. Whether the landlord covers these fees or passes them to the tenant, a well-drafted lease ensures transparency. Clear terms prevent disputes and help both parties understand their obligations. Moreover, clarity reduces the risk of late payments or unexpected costs.
Ensuring Transparency in Lease Agreements
Lease agreements should clearly state that tenants are required to follow all applicable HOA rules. Landlords should attach a copy of the HOA guidelines to the lease to ensure tenants understand their responsibilities, particularly regarding noise, parking, and property upkeep. Clarifying issues like “Does the HOA need to be notified if the unit is rented?” within the lease can help prevent future compliance disputes.
A lease agreement should include a clause like:
“The landlord will pay all HOA fees directly to the association. The tenant must comply with HOA regulations and is responsible for fines resulting from rule violations.”
Alternatively, you could say:
“The tenant is responsible for paying HOA fees of [$X] per month directly to the association. Late fees and penalties are the tenant’s responsibility.”
Document HOA Fee Changes in Writing
If HOA fees increase during the lease term, landlords should provide written notice to tenants. This avoids misinterpretations and guarantees both sides are aware of any financial adjustments. The lease should outline how fee increases will be handled and communicated if the renter is responsible for paying HOA fees.
Make HOA Fees Simple for Renters and Landlords With TrueDoor
Figuring out who pays HOA fees when renting can be confusing. Some leases include them in the rent, while others require tenants to pay separately. Knowing the terms before signing a lease helps avoid unexpected costs.
If tenants are responsible for HOA fees, the lease should outline how and when payments are made. Landlords should also be upfront about any possible fee changes. Clear communication makes renting seamless for everyone.
Before renting a property, tenants should review the lease and HOA rules to understand their responsibilities. Landlords can also benefit from professional guidance to ensure everything is properly documented and compliant. TrueDoor offers expert support with Orange County property management and property management in the Inland Empire, helping property owners stay on top of lease agreements, HOA requirements, and tenant communications. If you need expert property management, contact us for a hassle-free rental ownership experience in Southern California.