My partner and I own and live in an apartment about 5km from the centre of Dublin. It is a standard apartment development from the Celtic Tiger era, so it’s about 20 years old now. While the block is well kept, it is not particularly fancy, with about 120 apartments organised around six stairwells, two internal courtyards, modest grounds and an underground car park.
My query relates to the service charges, which have increased significantly in recent years. As we move towards retirement age, these are becoming a source of worry for me.
In 2019, the year before the pandemic, we were paying about €1,800, but the 2026 charges from our owners’ management company (OMC) are €2,750. While this includes a contribution towards the sinking fund, can a 53 per cent increase be justified over just seven years?
Your query is a variation of a question that many apartment owners are now asking, and it reflects a number of factors. One is the increase in operational costs for apartment developments in recent years and another is the ageing of developments, which is forcing owners to face up to the long-term cost of maintaining buildings over their full life cycle. For many owners, these costs were not visible in the early years of ownership.
In relation to ongoing maintenance costs, like all parts of the economy, apartment developments have seen significant cost increases since 2022. I would note some important areas.
OMCs are normally obliged to put in place block insurance. A key driver of the premium is the reinstatement value, ie the cost of rebuilding the development from zero. These values have increased substantially, in line with construction costs. Also, as blocks get older, they tend to have more insurance claims, for example bath or shower seals may not be properly maintained by property owners, causing water ingress. There has also been a reduction in underwriters taking on this business, although there are some indications that this is changing in 2026.
A second significant source of cost increases has been wages. Standard expenses for OMCs include cleaning costs, refuse collection, grounds maintenance and perhaps security. Hourly rates for these expenses tend not to be at the minimum wage level but are linked to it, eg through sectoral wage agreements. In the four years 2023-2026, the minimum wage increased by a cumulative 35 per cent and this has fed more or less directly into the services mentioned. While most people support low-paid workers in receiving higher wages, OMCs have no option but to pass on these costs unless owners agreed to a reduction in the quality of services provided.
A third area of cost increases relates to energy. Since spring 2022, with the Russian invasion of Ukraine, energy costs have been elevated. While these fell back somewhat in 2025, geopolitical uncertainty has seen them rise again in 2026, so OMCs are seeing both higher costs and more unpredictability. The final cost area I would note is ordinary repairs – the fixing of doors and locks, painting touch-ups, replacing carpet tiles, patching areas of render, etc. In general, one sees fewer such repairs in a new development and then a gradual increase over time.
The other big implication of the ageing of apartment developments is that the sinking fund moves from being a matter of theoretical interest to an urgent consideration. Each complex is different, but you mention that yours has six stairwells, which likely means six lifts. The expected lifespan of a lift is 20-25 years so these will now be reaching a point where either extensive modernisation or full replacement is required. This could cost €60,000 to €100,000 per lift, or higher in some circumstances. On top of that, many flat roofs start to show issues after 20 years and may need repairs or re-covering.
Original mechanical and/or electrical assets such as pumps, vehicle gates, intercoms, CCTV and fire safety systems (alarms, emergency lights, vents) may also need renewal or upgrading. Wooden windows or doors may be showing signs of degradation and require treating or replacement. And this is before one considers interiors, where recarpeting, repainting and a freshening up of the look of the development will normally be needed if a block is a quarter of a century old.
Such “renewal” is not just about bringing the development back to how it presented on day one but is also about responding to higher standards that have been introduced over time. For example, requirements for lifts or gate safety or fire safety systems are all higher now than 20 years ago. There are also new demands from residents, for example for more bike storage or electric vehicle charge points, which create further challenges for OMCs.
Sinking fund projects can often be spread over multiple years, provided there is a good plan. However, they cannot be avoided, or at least not without the development becoming “tired” or perhaps even not having functioning lifts or other assets, thereby greatly affecting the quality of life of residents, as well as rental and property values. I have no doubt that in 10 to 20 years’ time in Ireland, it will be obvious to a casual visitor (or potential purchaser) as to whether a particular OMC has built up and is spending a good sinking fund, or whether it has failed in this important duty to property owners.
As apartment living is relatively new in Ireland, there was a lack of knowledge among new apartment owners about sinking funds in the Celtic Tiger era, from 2000 to 2008. This period was followed by a severe economic crash, where property owners were under pressure and could not handle higher charges. However, there is now no excuse for a development not to have a strong sinking fund contribution in its annual budget. All responsible property owners should be pushing for this, as building a fund gradually reduces the risk of large levies or “cash calls” being required for owners. This view is backed up by the 2024 SCSI report entitled Real Cost of Apartment Block Maintenance – Examination of Sinking Funds, available from the SCSI website.
In summary, the increase in your charge over the past seven years from €1,800 to €2,750 does not seem unreasonable to me. Obviously, every development is different, and the detail will depend on the specifics of your block. In this regard, the usual advice about reviewing the annual accounts (which should be audited) and attending the agm applies.
Finally, I agree with you that service charges are an issue that people approaching retirement need to have on their radar. While people in houses outside of OMCs do of course also have an ongoing financial outlay to maintain their property, which may be just as high over time, there is less flexibility in an OMC as it operates in a communal way. As such, property owners approaching retirement need to be clear-eyed about how they will provide for these annual charges.
Finbar McDonnell is a chartered property management surveyor and a member of the Society of Chartered Surveyors Ireland
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