What can an apartment association do about unpaid charges?
Far more than the debtor expects. Where an apartment owner is late paying management charges, the association may claim interest at the rate laid down in the Law of Obligations Act. And since 1 February 2023 a second sum has been added: where the association may claim interest, it may also claim compensation for collection costs — up to €30 where the claim is up to €500, up to €40 where it is €500–1,000, and up to €50 where it exceeds €1,000. One common misconception: the association cannot set a different interest rate in its articles — that can be done only by agreement of the apartment owners. So “our articles say 0.5% a day” may well not hold.
📋 The rules
- Interest at the statutory rate
- Plus collection costs
- Debt up to €500: up to €30
- €500–1,000: up to €40
- Over €1,000: up to €50
🔓 Exceptions
- A different interest rate can be set only by agreement of the apartment owners
- The articles of association cannot alter the interest rate, even by a general meeting vote
- Collection-cost compensation comes on top of interest rather than replacing it
⚠️ Penalties & fines
The debt does not stay between the association and the owner — it moves to court and to enforcement. The association may claim interest and collection costs, and for larger arrears it can go to court — after which comes enforcement proceedings with bailiff fees, which are typically several times larger than the original debt. Practical advice for the debtor: do not go silent. A payment schedule is almost always more acceptable to an association than years in court, and a written agreement stops the costs growing. And advice for the board: check whether your interest rate rests on the statute or on an owners' agreement — a higher rate written into the articles can fall away in court and leave the association with less than the law would have allowed.
📎 Official sources
- Riigi Teataja · Apartment Ownership and Associations Act →
- Riigi Teataja · Law of Obligations Act § 113 →
- Labour Inspectorate · Legal help →
❓ Frequently asked
Can the association charge interest?
It can. Where an owner is late with management charges, the association may claim interest at the rate laid down in the Law of Obligations Act. A different rate can be set only by agreement of the owners.
How large are the collection costs?
Up to €30 where the claim is up to €500, up to €40 where it is between €500 and €1,000, and up to €50 where it exceeds €1,000. These sums come on top of the interest.
Can the articles set the interest rate?
They cannot. A rate different from the statute may be provided only by agreement of the apartment owners, not in the association's articles. A higher rate in the articles can fall away in court.
What happens if the debt grows?
The association can go to court, and enforcement proceedings follow with bailiff fees. Those costs are typically several times larger than the original debt, which makes silence an expensive strategy.
Is a payment schedule possible?
Usually yes. A written payment schedule is almost always more acceptable to an association than years of litigation, and the agreement stops interest and collection costs from growing further.
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