Yes, an owners' management company or its managing agent can collect service charges by SEPA direct debit once each unit owner has signed a SEPA mandate. You send each owner a pre-notification at least 14 calendar days before every collection, unless you've agreed a different timeline, and the owner can ask their bank for a refund within eight weeks with no questions asked. Homeowners paying service charges are consumers, so late fees and late payment interest shouldn't be added to anything they owe.
In this article
The short version
- Owners' management companies can collect service charges by SEPA direct debit.
- Send pre-notification at least 14 calendar days before each collection.
- Owners can claim a refund within eight weeks with no questions asked.
- Record the sinking fund contribution separately from the service charge.
- Homeowners are consumers, so don't add late fees or interest.
What the Multi-Unit Developments Act means for collection
Direct debit changes how the money is collected, while the Multi-Unit Developments Act 2011 still governs the amount and how it's set. Build your collections around these rules.
- A service charge can't be levied until a general meeting of the members concerned has considered it, along with an estimate of expenditure. Schedule the first collection only after that decision.
- Charges have to be calculated on a transparent basis and equitably apportioned between unit owners, so the amount collected from each unit can differ. Your mandates and collection schedule need to handle a different amount per owner.
- Every unit owner is obliged to pay the service charges levied under section 18, whether you collect by direct debit or they pay another way.
- The building investment fund, often called the sinking fund, has a default contribution of €200 per unit a year unless a members' meeting agrees another amount. It can only be spent on refurbishment, improvement, non-recurring maintenance and related advice, so show it as its own line on each demand and record it separately when it's collected.
When the members change the charge at a later meeting, you'll need to update each owner's next collection amount and tell them in the pre-notification before it's taken.
The SEPA rules for every service charge collection
The SEPA Direct Debit Core rulebook sets these rules, and they apply whatever tool you use to collect. Work through this checklist when you set up and before each collection run.
- Get a signed mandate from each owner you'll collect from. It records who you are, the owner's account and whether the collection is one-off or recurring.
- Decide whose creditor identifier the mandates use. If you collect through your own bank, the bank issues it, and it's a 13-character reference such as IE97ZZZ123456. Some payment providers collect under their own identifier by default.
- Send each owner a pre-notification of the amount and date at least 14 calendar days before the collection, unless you've agreed another timeline. It can go on the service charge demand.
- Submit the collection so it reaches the owner's bank at least one business day before the due date. Your bank or provider will set its own cut-off.
- After each run, check for collections that were rejected or returned, for reasons such as insufficient funds or a closed account, and contact those owners.
- Allow for refund requests. An owner can claim back any collection within eight weeks with no questions asked, or within 13 months if they say it wasn't authorised.
- Keep mandates in use. If no collection is made under a mandate for 36 months, it has to be cancelled, and the owner would need to sign a new one.
Point 6 needs particular care for owners' management companies. If an owner disagrees with a charge, they can get their money back from the bank within the eight weeks, but that doesn't change their obligation under the Act to pay what was levied. The charge stays owed, and the dispute goes back to the company to resolve.
Owners who won't sign a mandate
Some owners may prefer not to sign a mandate. They still owe the charge, so you'll want to give them another easy way to pay.
A payment link sent with the demand by email, SMS or WhatsApp lets an owner pay by card, Apple Pay, Google Pay or bank transfer. If they pay by card, you can't add a surcharge on a consumer debit or credit card, so you can't pass the card cost on to homeowners who pay with those cards.
For owners who fall behind, you can send reminders and a statement of what's outstanding. Because homeowners paying service charges are consumers, the statutory late payment rules for businesses don't apply, and late fees or interest shouldn't be added to the arrears. If an owner disputes the amount, it's a matter for the owners' management company, and either side may want legal advice.
What collecting by direct debit costs
With Adfin, the owners you collect from can pay by SEPA direct debit, card, Apple Pay, Google Pay or bank transfer, and pricing is 20c + 1% per successful payment. On SEPA direct debit and bank transfer the 1% part is capped at €2, so a collection of up to €2,000 costs at most €2.20; card payments aren't capped and use the standard card price.
For a €1,250 annual service charge, that works out as €2.20 by direct debit or bank transfer and €12.70 at the standard card price. There's no monthly fee, setup fee or contract, and you only pay for payments that succeed.
Adfin's free Essential credit control sends unlimited reminders by email, SMS and WhatsApp, produces statements and gives an aged debtors view where each owner in arrears has a named person on your side and a next step. It doesn't add late fees or interest, so nothing extra is added to what homeowners owe. Adfin is a certified Xero and QuickBooks app, and payments taken through it are marked paid in your accounts automatically.
Common questions
Can an owners' management company collect service charges by direct debit? Yes, once you have a signed SEPA mandate from each unit owner. You must send pre-notification at least 14 calendar days before each collection unless you agree otherwise.
Does an owner still owe the charge if they won't sign a mandate? Yes, every unit owner is obliged to pay the service charges levied under the Multi-Unit Developments Act 2011, however they pay. Give those owners another way to pay, such as card or bank transfer.
Can an owner get a service charge direct debit refunded? Yes, an owner can ask their bank for a refund within eight weeks with no questions asked, or within 13 months if the collection wasn't authorised. The service charge itself is still owed.
Can the sinking fund be collected by direct debit too? Yes, you can collect it with the service charge or separately. Record it as its own amount, since the building investment fund can only be spent on the purposes the Act sets.
Can we charge interest on unpaid service charges? Statutory late payment interest only applies between businesses and public bodies. Homeowners paying service charges are consumers, so don't add late fees or interest.
What happens if a service charge direct debit fails? You'll see the collection returned to your bank or provider with a reason such as insufficient funds or a closed account. Contact the owner before you try to collect again.
Sources
- Law Reform Commission - Multi-Unit Developments Act 2011, section 18, revised (accurate as of November 2026) https://revisedacts.lawreform.ie/eli/2011/act/2/section/18/revised/en/html
- Law Reform Commission - Multi-Unit Developments Act 2011, section 19, revised (accurate as of November 2026) https://revisedacts.lawreform.ie/eli/2011/act/2/section/19/revised/en/html
- European Payments Council - 2025 SEPA Direct Debit Core Rulebook, version 1.0 (accurate as of November 2026) https://europeanpaymentscouncil.eu/sites/default/files/kb/file/2024-11/EPC016-06%202025%20SDD%20Core%20Rulebook%20version%201.0.pdf
- European Payments Council - Creditor Identifier Overview (accurate as of November 2026) https://www.oenb.at/dam/jcr:5193cd07-f090-4378-abcd-06d97c700ab2/EPC262-08-v12-0-Creditor-Identifier-Overview.pdf
- Bank of Ireland - Direct Debit Creditor Guide (accurate as of November 2026) https://businessbanking.bankofireland.com/app/uploads/4293010_3240302-Direct-Debit-Creditor-Guide-Apr23-V02-FA.pdf
