Owners’ association fees: how they are calculated and who pays

What do owners’ association fees cover?

The association’s statute and approved budget set out the items, but an owners’ association budget usually centres on managing the property and maintaining its common parts, which the law defines to include the land, entrances, corridors, parking, tanks, pools, gardens, lifts and the like. Typical items:

• Maintenance: contracts for lifts, pumps, central air conditioning and fire systems, and emergency repairs.
• Cleaning: entrances, corridors, stairwells and parking, plus waste removal.
• Security: a guard or security company, CCTV and gates.
• Common-area utilities: corridor and outdoor lighting, shared water, and shared meters as valued by the general assembly.
• Administration: the manager’s pay, set by the general assembly, and the auditor’s fee where an auditor is required.
• Insurance: cover for the common parts if the general assembly decides on it.
• Reserve: an amount to meet costs beyond the approved budget, if the general assembly creates one.

How are owners’ association fees calculated?

The law does not set a fixed fee; it sets a rule for sharing it. The total is the approved annual budget, divided among the owners by their shares. The law requires every association’s statute to state how the subscription amount is set and paid, so your statute is the first reference for details.

The general rule: area ratio

Under the law, each owner contributes to maintaining and managing the common parts in proportion to their unit’s area out of the total unit area of the property. Each owner’s share in the common parts equals their unit’s area as a proportion of the total unit area in the Authority’s sorting approval document, and owners may agree to consider the unit’s value alongside its area. In a mixed-use property, such as a building with shops and flats, contributions may differ by the unit’s type of use.

Parts that serve only some owners

If some common parts serve particular owners exclusively, the executive regulation splits their upkeep and management among those owners only, by each unit’s area out of the benefiting units’ total area, unless agreed otherwise. For meters shared between units, each owner pays the amount the general assembly sets.

A hypothetical example of splitting the budget

Take a building of four flats totalling 500 square metres, whose general assembly approved an annual budget of SAR 60,000. The figures are illustrative only, not an average or a legal limit:

• Flat 1, 100 m²: a 20% share, so an annual contribution of SAR 12,000.
• Flat 2, 120 m²: a 24% share, so an annual contribution of SAR 14,400.
• Flat 3, 150 m²: a 30% share, so an annual contribution of SAR 18,000.
• Flat 4, 130 m²: a 26% share, so an annual contribution of SAR 15,600.

Who approves the owners’ association budget and sets the fees?

Financial decisions rest with the owners through the general assembly, made up of all the owners. Under the law:

1. The manager prepares a draft annual budget covering the cost of managing the shared property and maintaining the common parts.
2. The general assembly discusses and approves it; decisions are valid when owners holding at least three quarters of the total unit area approve, unless the statute requires more.
3. The manager collects subscriptions and spends from the approved budget within their powers, with the funds held in a bank account in the association’s name.
4. After the financial year, the manager prepares financial statements and an activity report, sends copies to the Authority and every owner, and the general assembly meets to approve them.

Owner or tenant: who pays owners’ association fees?

As a rule, the owner is liable. The law provides that when a unit is leased, the owner remains bound towards the association and third parties by all rights and duties relating to the unit and the common parts, unless agreed otherwise with the tenant.

In practice, a lease may shift the fees to the tenant, but that is an agreement between the two. If the tenant does not pay, the union normally claims from the owner, who then recovers from the tenant under the lease. A landlord should write the fees clause clearly and track payment personally.

Tips for a transparent budget and regular collection

Most disputes over owners’ association fees are about unclear spending, not the amount. These practices build trust and reduce late payment:

• Present the budget line by line: maintenance, cleaning, security, utilities and reserve, with the supporting quotes, before the general assembly meets.
• Show each unit’s share: tie every contribution to the unit’s area and share in the common parts, so owners see how it was worked out.
• Keep the money separate: a bank account in the association’s name, as the regulation requires, never a board member’s own.
• Keep detailed records: the regulation requires minutes and detailed account books of amounts owed by owners, which every owner may ask to see.
• Set clear payment dates: monthly, quarterly or yearly instalments as the statute provides, with a reminder before each one.
• Share reports regularly: what was spent, what remains and what maintenance was done; owners who see results pay more readily.

Refusing to pay owners’ association fees: what happens?

Paying the subscription is every owner’s legal duty, and no owner may give up their share in the common parts to escape their upkeep costs. Owning a unit in a property with an owners’ association also counts as accepting its statute and the general assembly’s decisions.

The main legal collection tool: the manager’s decisions and contracts within their powers become, once approved by the Real Estate General Authority, an executory instrument against owners under the Enforcement Law. The Authority states that Mullak offers an executory-instrument service for owners who default on association fees; check the platform and the Authority for the exact procedure.

Before escalating, unions usually start amicably: a clear statement of what is owed, a written reminder, a reasonable deadline and, if needed, a payment plan. Note that the law bars an association from restricting an owner’s use of their unit or the common parts for their intended purposes, so check with a specialist before measures such as cutting off services.