Unpaid maintenance charges: what if a neighbour doesn't pay?

The housing company’s bills arrive on time even if a shareholder fails to pay their charges: heating, water, electricity, maintenance, insurance, waste management, and loan repayments and interest.

A neighbour’s arrears are not passed on to the other shareholders to pay. A limited liability housing company is a separate legal person, and an unpaid charge is the shareholder’s debt to the company. Indirectly, however, arrears can affect everyone, which is why they are worth tackling early.

Why arrears concern everyone

In the accounts, an unpaid charge is a receivable of the company, but the money is not in the bank, and a receivable cannot pay the electricity bill.

Imagine a housing company that collects €40,000 a month in charges. Three shareholders fail to pay a total of €3,500 a month. Expenses stay the same, so in six months a shortfall of €21,000 has built up. With a good cash buffer, the company can cope for a while; otherwise paying ordinary bills becomes difficult.

The company then has to manage the shortfall by using its cash reserves, timing its expenses, stepping up collection or, as a last resort, reassessing the level of charges. Significant and persistent arrears can also affect how a lender assesses the company when a repair requiring a loan is coming up.

Arrears have become more common. According to the Economic Barometer published by the Finnish Association of Property Managers (Isännöintiliitto) in January 2026, 54 per cent of property management professionals reported an increase in unpaid charges over the previous 12 months.

The shareholder’s obligation to pay

Under chapter 3, section 1 of the Limited Liability Housing Companies Act, a shareholder is obliged to pay the maintenance charge (yhtiövastike) on the grounds set out in the articles of association. Depending on the articles, it may include, for example, a maintenance charge for running costs (hoitovastike), a financing charge (rahoitusvastike) or another charge.

The maintenance charge is not a service fee. A shareholder cannot refuse to pay it on the grounds that they do not use the lift or the sauna. If the apartment cannot be used for its intended purpose at all, for example because of repair work, the charge is reduced by the amount by which the company’s operating and maintenance costs decrease as a result (chapter 3, section 5).

Collection

The process usually begins with a payment reminder and voluntary collection. According to the Finnish Real Estate Federation (Kiinteistöliitto), the company is entitled to charge penalty interest under the Interest Act on an overdue charge, as well as reasonable collection costs under the Debt Collection Act. If voluntary collection does not work, the company can seek a judgment for the debt from the district court and collect it through enforcement.

Legal collection and taking possession of the apartment are not mutually exclusive; they can be used in parallel.

Taking the apartment into the company’s possession

Under chapter 8, section 2 of the Limited Liability Housing Companies Act, the general meeting may decide that an apartment is taken into the company’s possession for a maximum of three years if the shareholder does not pay an overdue maintenance charge (including any financing charge). However, the apartment may not be taken into the company’s possession if the breach is of only minor significance.

The law sets no fixed number of months. According to the Finnish Real Estate Federation, in practice the board can issue a warning aimed at taking possession on the basis of about two months’ arrears, and the general meeting is typically convened after three to four months’ arrears. Each case is assessed individually.

The procedure step by step

1. Written warning. The board must give the shareholder a written warning before a decision on taking possession can be made (chapter 8, section 3). The warning states its grounds and the possibility of the apartment being taken into the company’s possession. If the apartment is let, the tenant must also be notified of the warning.
2. An opportunity to put things right. If the shareholder pays the arrears without delay after the warning, the apartment cannot be taken into the company’s possession. The shareholder must, however, then reimburse the costs already incurred from the warning and from convening the general meeting.
3. General meeting decision. The decision states the grounds for taking possession, its duration and the premises concerned.
4. Notification of the decision. From 1 October 2026, the shareholder, the tenant and anyone else living in the apartment must be notified of the decision without delay (previously within 60 days). Otherwise the decision is ineffective.

Electronic notification

Following the amendment (535/2026), from 1 October 2026 the warning and the decision on taking possession can also be served electronically (chapter 8, section 3 a). The warning can be sent to the email address the shareholder has given in the register of apartments for notices of general meetings, or to a tenant via an electronic channel they have agreed with their landlord. In addition, an alert must be sent to another electronic channel, for example as a text message. Notification is deemed to have taken place on the third day after the alert was sent, unless shown otherwise.

Electronic notification cannot be used if it is obvious that the recipient will not receive the message, or if the sender knows that the recipient cannot use the channel because of age, disability or a similar reason. The traditional methods, namely service by a process server, another verifiable method and, under certain conditions, registered letter, are still available.

The procedure is formal. A defective warning or notification can derail the whole process, so it is often sensible to use an expert in housing company law.

What taking possession means

Taking possession does not transfer ownership. The shareholder still owns the shares, but the company gains possession of the apartment for a fixed period. Under chapter 8, section 6 of the Act, the board must let the apartment without delay at the going rent. From the rental income the company may cover the costs of taking possession, necessary repair costs for the apartment, unpaid charges and charges falling due during the period of possession. Any surplus is paid to the shareholder without delay.

Taking possession is a means of protecting the position of the company and the other shareholders, not a punishment. It is different from enforcement, in which the debtor’s property can be sold to pay debts.

Arrears and buying an apartment

Under chapter 3, section 7 of the Limited Liability Housing Companies Act, the new owner of shares is liable, alongside the previous owner, for charges the previous owner has left unpaid. The liability is limited to the total charges for the month of transfer and the five months before it. The new owner is not liable for a charge that fell due before the date of the property manager’s certificate and is not mentioned in it. A buyer should therefore read the property manager’s certificate carefully. More tips in the article on buying shares in a housing company.

Practical recommendations for the board

The following are practical recommendations, not legal requirements.

Monitor arrears regularly. The board should see at least the total amount of arrears, the number of shareholders in arrears, the age of the oldest receivables and the trend. If the total grows from €8,400 in January to €21,900 in May, it is no longer an isolated deviation.

Agree the collection process in advance. It is easier to decide on a procedure before anyone is in arrears. Write down the stages: due date, payment reminder, voluntary collection, assessment of the situation, legal collection if necessary and consideration of taking possession. The same process for everyone also supports the equal treatment of shareholders required by law.

Put payment plans in writing. The company may agree a payment plan at its discretion, but a shareholder has no statutory right to one. Agree in writing the instalments on the old debt, the schedule and the consequences if the plan is not kept, and require new charges to be paid on time.

Look at the finances as a whole. Arrears affect liquidity, the budget and the financing of renovation projects. If arrears grow just before a major renovation, the risk is quite different from that of a company with strong cash reserves. See also housing company financing.

Protect privacy. Shareholders can be told about the company’s financial situation, for example “unpaid charges have grown to €12,000 and collection is under way”, without revealing who owes money and why.

Behind arrears there is often a difficult life situation, such as unemployment, divorce, illness or an unexpected rise in costs. Compassion and consistent collection are not mutually exclusive. If arrears are allowed to grow, the company is in effect financing one shareholder’s housing with the others’ money, and the debtor’s situation gets worse as interest and costs accumulate. Long-running arrears are also one of the warning signs of a housing company’s financial problems, which are discussed in the article on whether a housing company can go bankrupt.

Frequently asked questions

Do the other shareholders have to pay a neighbour’s charges?

Not directly. The debt does not pass to the other shareholders, but the company’s cash shortfall can affect the finances of the whole housing company and future decisions on charges.

How many months of arrears lead to taking possession?

The law sets no fixed limit. What matters is that the breach is not minor. In practice, a warning can be given for about two months’ arrears, but the situation is always assessed case by case.

Does the shareholder lose their apartment when the company takes possession?

Not their ownership. The company gains possession of the apartment for a maximum of three years and lets it.

What did the 2026 amendment change?

The warning and the decision on taking possession can also be served electronically, and the decision must be notified without delay instead of within the previous 60-day period. In addition, the grounds for taking possession were extended to include, among other things, additional costs and nuisance caused by short-term letting.

Sources

• Limited Liability Housing Companies Act 1599/2009, consolidated text (Finlex, in Finnish) (opens in a new tab)
• Act amending the Limited Liability Housing Companies Act 535/2026 (Finlex, in Finnish) (opens in a new tab)
• Kiinteistöliitto: What can a housing company do about unpaid charges? (in Finnish) (opens in a new tab)
• Isännöintiliitto: Unpaid charges on the rise, 23 January 2026 (in Finnish) (opens in a new tab)

This article provides general information and does not replace case-specific legal or technical advice.