HOA, Sewer and Garbage as line items. Anyone do this?

Question

Hey BP community,

I'm both a landlord and currently a tenant (chose to rent in a new market rather than buy), and I came across something in my lease that I haven't seen before and wanted to get the community's perspective.

My landlord itemizes HOA fees, sewer, and garbage separately on top of the base rent (not listed in thier advert). So the lease shows:

- Base rent: $4,000

- HOA (75% proration): $200

- Sewer/garbage (TTSA/TSA): $100

- Total: $5,400/month

As a landlord myself, I've always just rolled these costs into the rent and quoted a single monthly figure. My thinking has been:

1. Simpler for everyone

2. Tenants budget for one number

3. I can adjust for costs annually without explaining which specific line item changed

But now I'm curious - is itemizing like this becoming more common?

What are the pros/cons from a landlord perspective? Does it create issues when these costs increase and you need to pass them through? Do tenants push back on increases to specific line items?

Would love to hear from those of you who do this - what's the rationale, and how do you handle it when those third-party costs go up?

Thanks in advance!

Richard F. · Answer

@Jason Barton, here I have never seen or heard of HOA fee being a separate line item for the Tenants. Probably because a Tenant would have a heart attack with a lot of increases we see due to incompetent HOA Boards. OTOH, the Owners of those properties whine and cry to to the PM's that they need to raise rents to cover. Tenants rarely care. They look at what's on the market for rent, total cost, and stay or move based on that. It's not Tenant fault if the HOA is poorly managed.

I'm speaking as a retired 30 year PM and HOA Managing Agent. I don't know what happened to the HOA Subforum that used to be on here, but if you have HOA/Condo questions, I'm here.

Kenneth Garrett · Answer

@Jason Barton

I am assuming this is a single family home or town home that has it’s own water/sewer and garbage.  I have the tenant sign up for water, sewer and garbage. Those utilities are the responsibility of the tenant. Same as electrical, gas and any other utility. This is disclosed in the rental listing.  HOA Fee would be on top of rent.

You could roll those numbers into the rent, but not everyone does.  It should be disclosed in the listing.  I am assuming you didn’t mention water because the HOA covers it.

I don’t roll them into rent because the sewer amount can fluctuate same as water.

Allison Park · Answer

The all inclusive cost is the simplest, but I do think there is starting to be more itemization due to the significant inflation.  Right now my rentals are all inclusive but the HOA included trash so I might break that out so base rent stays competitive I the future.

Bill B. · Answer

The question I don’t see asked, how did you get from $4,000-$5,400 with those numbers?

it may be the landlords way of showing you they aren’t putting all your rent in their pocket. . it may there way of avoiding limitations if the area has or invokes rent control?       ‘I never bill seperately for HOA fees, only their fines. But I do have to bill for sewer and water that have to stay in my name.   But.  I can’t see how it doesn’t leave a bad taste in any applicants mouth. If I clicked on a property listed at $4k and it was $5,400 I’d move on, even if it was a good deal. Only you know if the net price is competitive in your market for that property. It’s hard to complain about transparency.

Michele Fischer · Answer

I think it completely depends on what other landlords are advertising, and this can vary by area or by year.

Tenants are trying to comparison shop and understand their total cost.  If one option is an all in cost and another is itemized, it is difficult to compare and the lower advertised price may get more interest even if it isn't the best deal.  Align to your market.

Agree that the advantage of the all in price is that you don't need to manager them seperately.  But the downside is that the tenant may not see their role in keeping cost usage and costs in line if they never see any indication that rent changes with changing costs.

Jason Barton · Answer

Thanks for feedback. Yes. SFH. Sewer/Garbage, for some reason in this locale, must stay in the owner's name. Other utilities are my responsibility. HOA does not include any utilities. It is just general maintenance of the area. In the properties I own, I include water, garbage, and the HOA as part of the total rent, I was surprised to find it in the lease as a separate line item was not listed in the advert.

HOA, Sewer and Garbage as line items. Anyone do this?

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