How is a service charge calculated in Ireland?

The OMC prepares an annual budget of the development's running costs, then apportions it across the units by the schedule set out in the development's documents, often by size or a fixed share. Each owner's charge is their apportioned part of that budget.

Is the service charge the same as the sinking fund?

No. The service charge covers this year's running costs. The sinking fund is a separate, ring-fenced reserve for large, non-recurring future works such as a new roof or a lift replacement. Both are required by the MUD Act 2011.

Can I refuse to pay the service charge if I disagree with it?

No. Once the charge is properly set, it is a debt owed to the OMC, and non-payment shifts the cost onto your neighbours. If you disagree, the place to raise it is the general meeting, where members can question and vote on the charge.

Money

OMC service charges explained

Q: What does the service charge cover?

Ongoing running costs: block insurance, common-area maintenance and repairs, cleaning, waste management, shared lighting and utilities, lift servicing, and the cost of managing the development. Large one-off works are funded separately from the sinking fund.

What the service charge is, what it pays for, how it is worked out, what the law requires, and what your rights are, for Irish apartment owners, directors and managing agents.

7 minUpdated July 2026

The short version

1The service charge is each owner's annual share of the development's running costs, required by the MUD Act 2011.
2It covers ongoing costs such as insurance, maintenance, cleaning, waste and management, not large one-off works.
3It is calculated from an annual budget, apportioned across units by the development's schedule.
4The charge must be set on a transparent basis and put to the members, who can question and vote on it at a general meeting.
5It is separate from the sinking fund, which reserves money for large future works.

What is a service charge?

The service charge is the annual amount each unit owner pays towards running the shared parts of the development. You own your apartment outright, but the roof, hallways, lifts, grounds, insurance and shared services belong to the Owners' Management Company, and the service charge is how the cost of looking after them is shared fairly among everyone who benefits.

What does the service charge cover?

The charge funds the development's ongoing, year-to-year running costs. Typically that includes:

Block insurance for the building.
Maintenance and repair of the common areas and shared structure.
Cleaning and grounds upkeep.
Waste management.
Shared lighting and utilities.
Lift and plant servicing.
The cost of managing the development, including any managing agent's fee.

Large, one-off works such as a new roof or a lift replacement are not paid from the service charge; they come from the sinking fund, which is a separate reserve.

How is the service charge calculated?

Calculating the charge is a two-step process. First, the OMC (usually with its managing agent) prepares an annual budget of all the expected running costs for the year. Second, that budget is apportioned across the units using the schedule set out in the development's documents. Apportionment is often by unit size or by a fixed share per unit, so a larger apartment usually pays a larger share. Your service charge is simply your apportioned part of the total budget.

Transparency is the point

A good service-charge demand shows the budget it comes from and the basis of the apportionment, so an owner can see what they are paying for and why. Cuan issues a plain-English statement per unit, apportioned by the schedule, rather than a bare figure.

What does the MUD Act 2011 say?

Section 18 of the Multi-Unit Developments Act 2011 requires every OMC to establish and maintain an annual service charge scheme to cover the ongoing costs of the development, such as insurance, maintenance, repairs, cleaning, waste management and shared services. The Act requires the charge to be calculated on a transparent basis and put to the members, who are entitled to question it and to vote on it at a general meeting. This is general information, not legal advice.

How is the service charge approved?

The charge is not set behind closed doors. The budget is prepared, then brought to the members, normally at the annual general meeting, where owners can ask questions and vote. This is the proper forum for disagreement: an owner who thinks the charge is too high or unclear raises it at the meeting, rather than simply declining to pay.

How is the service charge collected?

Once set, the charge is billed to every unit and collected, most commonly by direct debit or bank transfer rather than card. Where a PSRA-licensed managing agent is involved, the money must settle to a client account and be held separately from the agent's own funds. Good service-charge collection software issues the whole development in one run, collects by direct debit, reconciles the payments automatically, and settles straight to the client account.

What happens if an owner does not pay?

An unpaid service charge is a debt owed to the OMC. When it goes uncollected, the shortfall falls on the owners who do pay, and the development can end up unable to fund insurance, maintenance or its reserve. The OMC can pursue arrears, ideally through a fair, staged process rather than a confrontation. Our guide recovering service-charge arrears, humanely explains how.

Your rights around the service charge

As an owner you are entitled to a service charge set on a transparent basis, to see the budget it is based on, to question it at the general meeting, and to vote. You are also entitled to the development's accounts. Those rights are the counterweight to the obligation to pay: you must pay a properly set charge, and the OMC must set and account for it openly.

Common questions

The service charge is the annual amount every unit owner pays towards the running costs of the development's common areas: insurance, maintenance, cleaning, waste, shared utilities and management. The MUD Act 2011 requires every OMC to have an annual service charge scheme.

Next: The service charge covers this year. To understand how OMCs save for the big future bills, read Sinking funds: the complete guide.

Note: This guide is general information for managing agents and OMC directors, not legal or financial advice. Cuan encodes these obligations as workflows, but always confirm specifics with the OMC's solicitor, accountant or company secretary.