HOA on rental unit: pay yourself or let tenant pay?

A question for landlords - when it comes to paying HOA on your rental units, what works out better when it comes down to filing your taxes?

a. Have tenant include the HOA as part of rent and then LL pays the HOA. In this case, LL will obviously deduct HOA as an expense from rental income. Are there any restrictions etc on HOA deduction as an expense?

b. Have the tenant pay the HOA directly and call it out in lease as a separate fee from monthly rent. HOA never hits LL bank account and so LL never has to worry about it during tax filing. Seems like the cleaner approach unless I am missing something.

I’m not a landlord (yet) but I read somewhere that if you put the responsibility on the tenant and he/she doesn’t pay the dues, the HOA can place a lien on your property. I wouldn’t risk this if I were you.


Landlord always pays the HOA. Tenants will never agree to paying any HOA. HOA is always a deductive expense so nothing to worry about when filing taxes.


Totally agree. What I heard a lot is HOA may have special assessments all the time (when new roof is needed or other big expenses pop up). I am sure your tenants will not be nice enough to pay that. Even if you are going to cover that yourself, your tax will be more messy as part of the HOA expenses will be paid by you, and part by tenants.

Guys - Please assume for the sake of this discussion that tenant paying HOA is not an issue. Tenant is fine with it, LL has ability to monitor the timely payments online etc. And I don’t think tenant paying regular HOA while LL paying special assessments is any messier than LL paying all HOA dues since LL basically would be agnostic to regular monthly HOA payments. Those don’t hit LL bank account so never ever appear on LL’s taxes. Treat special assessment similar to big repair expenses - you pay them infrequently and track them.

This is the heart of the question I wanted to confirm. So there is no fine print in tax code that limits LL’s ability to capture all HOA dues as expenses against rental income?

Yes you can deduct 100% of it no worries.

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Ditto on William’s response too, 100% deductible. But either you pay or tenant pay, wouldn’t the rent be just different? e.g. Less rent amount when tenant pay it, or higher rent if you LL pay? For the sake of simplicity (like tenant turn over and paying it on time), I recommend LL pay for it. I just like things set it and forget it, not needing to monitor it every month or have to setup to pay during vacancy.


I want to add that it’s bad practice to ask tenant pay HOA dues on your behalf. Tenants don’t want to do it, nor would you want them to do so. Because if they ever missed a payment, the late penalty or missed dues will be on you, not the tenant. HOA always goes after the owner of record for payments.

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I cannot believe someone created a thread about having tenants pay the HOA. What is next? Ask them to pay property taxes? It is all a matter of adjusting the rent accordingly.

Of course landlord pays taxes, HOA and, in grade B (or lower) neighborhoods, water, sewer and trash. They all can put liens on LL’s property.


About water, do landlords need to worry about high usage because it’s free for tenants? I guess in apartment buildings they don’t have lawns to water so that’s not bad?

Is it worth it to install individual water meters?

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Yes and no. The worry is not about water consumption by tenants but about leaks and they do not report it because “water comes for free out of the faucet”.

It’s particularly annoying when water is billed every 60 days and they mail the bill 30 days after the reading. So, when you see the high bill, the leak may have gone on for as much as 90 days already, even if you fix it the very same day, your next bill will still be inflated, just not quite as high.

I’m not talking about difficult to find leaks inside the wall. It’s the typical running toilet where the flapper has worn out ($4, but remember, water is free, so why bug the landlord about it). I’m thinking I should have flappers with me all the time and routinely replace them every 12 months.

And then there’s … well…you decide. Property (9 units) has sprinkler irrigation and they’re running in summer months 3 times a week around 6am.
One of the sprinkler drip heads had popped off, maybe a kid had pulled it, nobody knows. So the water is just shooting out there and subsequent stations get no water. The water is spraying right into the walkway.

Now, this does irk the tenant who goes to work early. He doesn’t want to show up in wet pants.

Luckily, he’s handy and can solve the problem.

He pushed the hose with the missing drip head into the downspout’s drain pipe. No more mess on his way to work.

My water bill increased $600 due to this and $400 the following cycle.

Oh, and the tenant who I suspect did this “repair”, I think it is the one who pays $500 less rent in exchange for “maintenance work” that he does on the property.

So, here is another advice. Never reduce rent (fixed $ amount) for work that the tenant performs (variable amount). It always ends up that you get below market rent and little work is done if any at all, or low quality work (see my sprinkler line repair).

Can I bill the excessive water use to the tenants? No. The rental contract says it’s included. And I cannot know for sure who did that “repair”.


I would never pay for tenants water or garbage bills. Only exception is if they are covered by the HOA then they get it for free. Tenants should always be accountable for their own utility usage. In 5 years I have only gotten one notice from the city for failure to pay garbage but I have gotten on top of that and has been resolved by the tenant since.

Oh… also in San Jose the city started to charge garbage service as part of the property tax… so that’s another tenant freebie if they happen to live in San Jose. But you can always account for that by increasing the rent a little bit to cover for that free service.

From my experience, all professionally managed apartments do this - they advertise a certain rent but when you sign the lease, you find out you’ll be paying extra for common area water/electricity/landscaping etc which is akin to HOA fees. So, IMHO, no harm in asking if there’s a benefit to this approach.

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