Who Pays the HOA Dues on a Rental Property?

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Real Estate Agent with Long & Foster REALTORS®, Manassas, VA VA License # 0225089470

Who Pays the HOA Dues on a Rental Property?

When representing tenants, I am often asked, "Will we be responsible for the HOA dues if we rent this property?"  The answer is NO!  No way!  And even if the landlord wants you to, I'll convince them that's a BAD idea.  And I've had to do that a time or two over the past few years, which is astounding.  You'll see why if you think that tenants should pay the HOA fees directly as they are the ones getting the benefits of the HOA services and amenities. 

Home owner's associations are one the entities that can place a lien on your property for non-payment.  So as the owner, or in the case of the rental scenario-- as the landlord, you NEVER want to make another party responsible for something that negatively impact you or the clear title to your property. 

Case in point:  Right now I have first-time home buyers who are thrilled to have found a great home in Manassas Park.  Unfortunately, the owner of the property, who was transferred out of state, rented the property for four years.  The two sets of tenants in the home during those years were FRIENDS of the landlord.  And being a trusting sole, the landlord left his friends to pay his HOA dues.  Both sets of friends stiffed the HOA, probably thinking it was no big deal.  Unfortunately, the Seller is now having to pay off five liens that were filed against the house for non-payment of dues over those four years. 

Here's the sick part.  The monthly HOA fees were a max of $38 per month.  Over 48 months that's $1,824.  The liens total over $3,100!  Why?  Late fees and legal fees, of course.

Never put a tenant, even if they are your friend, in charge of HOA fees. 

 

 

 

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Re-Blogged 8 times:

Re-Blogged By Re-Blogged At
  1. Wallace S. Gibson, CPM 08/19/2011 05:25 PM
  2. Dave Conners 08/22/2011 01:15 PM
  3. Beverly Femia 08/22/2011 09:00 PM
  4. Beverly Femia 08/22/2011 09:01 PM
  5. Ruby Lee Sweeting 08/23/2011 12:24 AM
  6. Allyson Hoffman 08/23/2011 12:46 AM
  7. Legacy Property Group 08/23/2011 05:38 PM
  8. Joy Carter & Jeff Booker Brother and Sister Team 08/24/2011 09:42 AM
Topic:
Lending / Financial
Location:
Virginia Prince William County
Groups:
"Whacked"!!!
Never Answer The Same Question Twice
Diary of a Realtor
Bartender, Make it a Double
BananaTude
Tags:
what happens if you dont pay your hoa dues
who pays the hoa fees in a rental

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Chris Ann Cleland
Long & Foster REALTORS®, Manassas, VA - Bristow, VA
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Diane:  Once the lien is file, the money is due upon sale. 

Aug 25, 2011 11:16 AM #94
Rainer
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Gerard Gilbers
Stingray Performance Marketing - Waldorf, MD
Your Marketing Master

My daughter was caught up in a situation where the "owner" didn't want to pay the fees and it caused problems. The house became bank owned property as a result of a lawsuit against the previous owner. As a renter she was denied services, trash and other amenities until the HOA "found" the check that had been sent by the bank!

Aug 26, 2011 01:11 AM #95
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Chris Ann Cleland
Long & Foster REALTORS®, Manassas, VA - Bristow, VA
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Gerard:  That stinks.  Usually it's hard for trash providers to single out a home owner who isn't paying in townhouse communities. 

Aug 26, 2011 06:47 PM #96
Rainmaker
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Steven Pahl
Keller Williams Tampa Properties - Tampa, FL
Real Estate Consultant Tampa, FL 813-319-6423

Dumb landlord, very dumb!

Aug 28, 2011 11:04 PM #97
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Chris Ann Cleland
Long & Foster REALTORS®, Manassas, VA - Bristow, VA
Associate Broker, Northern VA

Steven:  Agreed. 

Aug 29, 2011 02:49 PM #98
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Anne Clark
Metro Referrals - Gainesville, VA

This is great information with a story that makes the reason owners should never put the tenants in charge of making their HOA payments directly to the HOA.

Sep 12, 2011 09:37 PM #99
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Chris Ann Cleland
Long & Foster REALTORS®, Manassas, VA - Bristow, VA
Associate Broker, Northern VA

Anne:  Having an actual story to relate why it's so important really does help the message stick with people.

Sep 13, 2011 11:19 AM #100
Anonymous
Kevin

This thread covers monthly HOA dues.  What about if an existing tenant wants his girlfriend to move in and the landlord agrees and there is a one time HOA registration fee?  Is it appropriate to ask the new tenant to pay this fee?

Dec 11, 2011 06:00 PM #101
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Chris Ann Cleland
Long & Foster REALTORS®, Manassas, VA - Bristow, VA
Associate Broker, Northern VA

Kevin:  I would think that is reasonable to ask the tenant to pay.

Dec 12, 2011 11:26 AM #102
Anonymous
Sagie Shemesh

Wonderful post and a great reminder. Take control over the tenancy or tenancy will control you.

 

Jul 01, 2012 02:36 PM #103
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Chris Ann Cleland
Long & Foster REALTORS®, Manassas, VA - Bristow, VA
Associate Broker, Northern VA

Sagie:  I recently ran into a Seller who wanted the tenants to pay the HOA fee.  I referred them to this post.

Jul 01, 2012 02:40 PM #104
Anonymous
Meloney

Here is the other side.  I am a responsible tenant and signed a lease with homeowner who put in lease agreement they would pay HOA dues and included in my rent was pool access.   HOwever i find out i cannot gain access to pool because the homeowner/landlord is deliquent on dues and i cannot get into the pool  what right do i have as a tenant?  it's part of rent yet no benefit. 

Jul 02, 2012 05:31 PM #105
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Chris Ann Cleland
Long & Foster REALTORS®, Manassas, VA - Bristow, VA
Associate Broker, Northern VA

Meloney:  Much lesser of a consequence than having a lien slapped on the house.  If I were you, I would approach the HOA about doing a membership for your family individually.

Jul 02, 2012 06:10 PM #106
Anonymous
Bruce

Hi Meloney,

Great article! I just rented my house and the rental agreement says that the tenant is to pay for all utilities and services and that I the landlord pay for all taxes. I understand what you are saying of making sure that it get paid. My Sewage is that way billed to me  but I collect it from the tenant. I'm just not sure if HOA fees are Utilites and services or taxes. Do you know?

Thanks,

Bruce

Oct 15, 2012 02:00 PM #107
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Chris Ann Cleland
Long & Foster REALTORS®, Manassas, VA - Bristow, VA
Associate Broker, Northern VA

Bruce:  HOA fees can sometimes include utlities, but it is more about the fact that the HOA can place a lien against the property for unpaid dues.  

Oct 15, 2012 03:19 PM #108
Anonymous
Bruce

Hi Chris,

My HOA does not include any of the typical utilities. It includes lawn care, street maintenace and access to the pools, parks and fitness center. So in the Lease agreement it says tenant pays for all "Utilities and Services" and Landlord pays for "Taxes". My feeling is that the HOA comes under the definition of "Utilities and Services" and should be paid by the Tenant. Am I correct in my thinking?

Thanks,

Bruce

Oct 16, 2012 12:25 PM #109
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Chris Ann Cleland
Long & Foster REALTORS®, Manassas, VA - Bristow, VA
Associate Broker, Northern VA

Bruce:  Add it to the rent and have them just write you a check.  If you put a tenant in charge of paying anything that can result in a lien on your property, you are asking for trouble.

Oct 16, 2012 02:03 PM #110
Anonymous
Janee

In our situation, the dues are included in our rent but the property management company isn't paying the dues.  The owner of our townhome is in the Military and are stationed over seas and the property management company is supposed to be taking care of things here.  The dues haven't been paid since the beginning of our lease, which was a year ago, and are now over $1000 behind.  What would our next step be? 

Oct 14, 2013 10:50 AM #111
Anonymous
Josie
I am a tenant of a property where there are HOA dues of around $250 for the owner which includes Utilities plus the usual condominium blanket insurance, maintenance, etc. In a desperate need to obtain get a rental lease one month out prior to returning to my home on the other side of the US, I was told before I looked it that the rent included water, sewer, and garbage collection which made me feel better about the rent price of $1200. Then after I looked at it and really liked it, I was told that I would be paying for $100 of the HOA Dues due to the utilities paid for by the HOA being included in the rent so my monthly rent paid to the owner would be $1300 instead of $1200. I just accepted it as I did like the place but was grumbling underneath thinking that I was deceived a bit. I found it through Zillow which does not include as many notes about fees as the public view of the MLS so I also assumed I had missed something. Turns out that now that we are leaving, she posted it as $1100 with rent including Water, sewer, garbage, cable T.V. I assumed she had lowered the rent and was not including any addition for the HOA fees since the utilities were included. Wrong! I have been very cooperative in showing the unit and one of the agents said I didn't have to answer it but asked how much did I pay in rent. He asked how much the HOA dues were as the listing agent had passed by and mentioned that it was $1100 plus HOA dues. I said I thought they were around $250 but they would have to ask the listing agent as I paid $100 added on to the posted rent. I then sent a note to the listing agent as I had been telling people the rent was the $1100 which included the above utilities. The listing agent replied saying that the rent was $1100 plus $200 HOA fees. She then said the HOA fees included the utilities plus the use of the amenities (small pool, spa, and small exercise room). She also said that I should refer people to her as I couldn't see all the terms on the MLS listing. Well by the showing agent's questions, he didn't either. The prospective renter was very positive about the property but haven't heard that he took it. The market is such that $1100 is fairly competitive rent but $1300 competes with only 2 of 215 rental properties and those 2 have more space, a double garage instead of a single, and are newer. One of them includes the same utilities as this unit. My point here is that it seems deceptive for a listing agent to post a rent and then add on "HOA Fees' which already includes part of what is said to be within the rent. In my opinion, the rent should be set by the owner so that they take into account the HOA fee expense. And, if the showing agent didn't see that within the MLS listing realtor notes, then it has to be some violation of the listing rules. Part of my interest in the future rent is that we have two months off left on our lease but can get released if they can rerent it. We decided to help generate interest with our own posting knowing we would immediately have to refer them to her. However, that was based on our understanding the rent was $1100 including the above utilities. Now, I'd rather eat the last couple months of rent than deceive people with misinformation and a price that is not competitive. Am I looking at this correctly that it may be a violation of realtor ethics?
Apr 13, 2014 09:55 AM #112
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Chris Ann Cleland
Long & Foster REALTORS®, Manassas, VA - Bristow, VA
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Janee:  Unless there is a service you are missing as a result, there is very little reason for you to do anything.  If you are missing a service such as access to the pool, or cable and internet service, then I'd consult with an attorney and what to do next.

Josie:  I'm not sure this is a violation of the code of ethics or not.  It's hard when you don't see the violation in your own MLS first hand or know what other choices the agent may have had.  As for owners, they can absolutely choose to have a tenant pay their HOA or condo fees.  However, if they go unpaid, the owner is in trouble.

Apr 13, 2014 12:37 PM #113
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