Sunday 8 December 2019

Apartment service charge arrears on the rise

The number of apartment owners failing to pay a service charge is on the rise.
The number of apartment owners failing to pay a service charge is on the rise.
Charlie Weston

Charlie Weston

THERE has been an increase in the numbers of apartment owners failing to pay service charges.

Up to 20pc of apartments owners are behind on the payment of the service charges, which are in place to pay maintenance, repairs and upkeep of the grounds, the Irish Independent has learned.

And the failure of occupiers to pay the charges is leading to a fall in maintenance standards at many developments.

A new survey from the Society of Chartered Surveyors Ireland shows large numbers of property managers reporting higher arrears on service charges this year.

Seven out of 10 property managers reported an increase in service charge arrears.

Service charges are fees levied on apartment owners to cover the cost of providing regular maintenance and repairs of common areas. These include servicing of lifts, upkeep of the grounds, painting and ongoing repairs.

If you buy an apartment then an owners' management company legally owns the common areas and is responsible for their upkeep.

Squeeze

Service charges can be up to €1,500 a year for a two-bed unit in Dublin.

The squeeze on the income for management companies means the committees that run them are being forced to withdraw services, said Pat Winters of the society's residential property management professional group.

He said: "The fact that around 70pc of property managers surveyed report that there has been an increase in arrears in service charge payments is very concerning.

"The increase in arrears puts financial pressure on owner management companies to continue to provide services."

He said that apartment owners who are paying service charges are effectively subsidising those who aren't paying.

The survey revealed that the main reason for the rise in service charge arrears is financial hardship being suffered by apartment owners.

And there is little prospect of the problem easing soon, Mr Winters said.

More than 60pc of chartered surveyors feel that the arrears issue will most likely remain the same in 12 months' time.

This is because of expected increases in energy costs, waste charges and insurance premiums in the next year, the surveyors said.

Irish Independent

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