Service Charge Collection from Tenants vs Owners: Who Pays and How

In many apartment buildings a large share of flats are rented out, and the owner may live in another city or abroad. When the monthly bill goes unpaid, the tenant says "the owner handles that" and the owner says "my tenant pays you directly". Meanwhile, the arrears grow.

Clear rules for service charge collection from tenants — and from owners when tenants fail — remove most of this confusion. Here is how to set them up.

Why tenant flats fall behind more often

Tenant-occupied flats tend to build up dues for predictable reasons:

• No single person feels responsible. The rent agreement may or may not mention the service charge, and the association often does not know what it says.
• Contacts go stale. The association has the owner's old number, or only the tenant's, and nobody updates it when a tenant leaves.
• Move-outs leave gaps. A tenant leaves mid-month with two months unpaid, and the owner only finds out much later.
• Reminders go to the wrong person. The SMS reaches someone who no longer lives there.

Decide the rule: who is liable?

Before chasing anyone, the committee must agree who is ultimately responsible. Check your constitution or by-laws first; many associations already say that the flat owner is the member and therefore liable. If the documents are silent or unclear, take legal advice before adopting a rule.

Most associations end up with one of these models:

The second model is the most practical for many buildings: the person living there pays day to day, but the owner remains responsible for anything left unpaid. Whatever you choose, write it down and share it with every owner. A written rule is the foundation of reliable service charge collection from tenants, because everyone knows who to ask when a bill is missed.

Keep two contacts for every rented flat

For each rented flat, keep a short record:

1. Owner's name, mobile number and an alternative contact (a relative or caretaker in Bangladesh if the owner is abroad).
2. Current tenant's name and mobile number.
3. Date the tenancy started.
4. Who pays the monthly service charge under your rule.

Ask owners to inform the office whenever a tenant changes. A simple line in your notice — "Owners must inform the office within seven days of a new tenant moving in or out" — goes a long way.

Tip: Send the regular monthly reminder to whoever pays, but copy the owner once dues pass 60 days. Owners are often unaware their tenant has stopped paying.

Service charge collection from tenants at move-out

Most tenant-related arrears are created on the day a tenant leaves. Build a short move-out check into your routine:

Before the tenant leaves

• Ask the owner or tenant to notify the office at least a week before moving out.
• Share a statement showing any dues up to the move-out month.
• Many associations ask the caretaker or guard to inform the office when a moving truck is booked, so that dues can be settled in time.

On the day

• Collect any outstanding amount and issue a receipt.
• If the tenant cannot pay, inform the owner in writing the same day, with the amount and months.

After the move

• Update the contact record so reminders go to the right person.
• If the flat is empty, confirm with the owner that the regular charge continues (unless your policy says otherwise for vacant flats).

Avoid blocking a tenant's belongings or stopping them physically from leaving. Even if dues are unpaid, such steps can create legal trouble for the association. Settle disputes through the owner and your by-laws.

A worked example

Say an association of 120 flats has 45 rented flats, with a monthly service charge of ৳3,000. A tenant in flat C-5 leaves at the end of March with January to March unpaid, so ৳9,000 is outstanding.

Under the "tenant pays, owner liable" model, the treasurer:

1. Sends the owner a written statement for ৳9,000 with the months listed.
2. Follows up with a call after a week.
3. Agrees, if needed, to let the owner pay in two instalments.
4. Records each payment against the flat, not the departed tenant, so the flat's history stays complete.

This is service charge collection from tenants done the safe way. The key point is that dues belong to the flat, not to whoever happened to live there. That way, nothing disappears when people move.

Sample notice to owners

"Dear Flat Owners, under the association's rules the monthly service charge for each flat is the owner's responsibility, even when the flat is rented out. Your tenant may pay on your behalf, but any unpaid amount remains due from the flat. Please inform the office within seven days of any change of tenant and keep your contact number up to date. — Secretary, [Association Name]"

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How Society Keeper helps

Society Keeper keeps dues against each flat, with the owner and resident recorded separately, so arrears stay with the flat when a tenant moves out. Monthly due-reminder SMS and SMS receipts help both sides see what has been paid, and the dues aging report shows which rented flats are slipping past 60 or 90 days. You can import existing flats, owners, residents and old dues from Excel to get started — see the free demo.