Unpaid Service Charge: What a Condo Can Do
Updated 3 November 2026 · Land & Property editorial team
Under the Condominium Property Act, 2001, a corporation can sue an owner in debt for unpaid contributions, register a charge against the unit, and charge interest if its rules allow. The debt can be claimed from the owner when the levy was passed and the owner when the claim is filed, jointly. A buyer should ask for the corporation's certificate of amounts owed before completion.
- Recovery by action in debt
- Act 4 of 2001, s.32(1) and (2)
- Charge against the unit
- Corporation may register a charge for the unpaid contribution (s.32(5) and (6))
- Interest
- Only if the corporation's rules permit it (s.33)
- Arrears certificate
- Corporation must certify the amount payable on an owner's application (s.32(3))
How does a condominium corporation raise and recover service charges?
When a condominium plan is registered, an owners' corporation is formed from all the unit owners. Its functions include managing the common property, keeping it in good repair, and maintaining a fund for administrative expenses, which it raises by levying contributions on the units in proportion to their unit entitlement (Condominium Property Act, 2001, Act 4 of 2001, section 20(1)(a) to (e)). The unit entitlement, called the unit factor, is a figure on the plan that may be set using the size, location and view of the unit, as the Act defines it. See Owners' corporation and Condo Service Charge in Uganda for the basics.
Section numbers on this page follow the 2001 text published by the Ministry of Lands, Housing and Urban Development. A revised edition of the Act may number them differently, so confirm with a lawyer. This page is general information as of November 2026, not legal advice.
What recovery powers does the Act give a corporation?
| Power | What the Act says | Section |
|---|---|---|
| Action in debt | A corporation may recover amounts payable under the rules from an owner or tenant by an action in debt | 32(1) |
| Levied contributions due | A contribution is due and payable on the passing of the resolution and in line with its terms, and may be recovered from the owner when the resolution passed and the owner when the action started, jointly and severally | 32(2) |
| Charge on the unit | The corporation may present for registration a charge against the owner's title for the unpaid contribution, creating a unit charge equal to the unpaid amount | 32(5) and (6) |
| Withdrawing the charge | When the amount is paid, the corporation must withdraw the charge | 32(7) |
| Delegation | It may delegate these functions to the managing agent | 32(8) |
| Interest | It may charge interest at the rate in its rules, if the rules permit | 33 |
| Fines under the rules | Fines for breach of rules are civil penalties and can be sued for as a civil debt | 30(8) and (9) |
In plain words: the corporation can sue, it can put a charge on your title, and the debt follows the unit. Whether it adds interest depends on the rules your building adopted. Ask for a copy of the rules before you buy.
Do I inherit the seller's arrears?
You can. Section 32(2) lets the corporation recover a contribution from the person who owned the unit when the resolution was passed and from the person who owns it when the action is brought, jointly and severally. That means a corporation could claim old arrears from a new owner once the sale is complete. If the corporation has also registered a charge on the title, that charge stays against the unit until it is withdrawn (section 32(5) to (7)), and a search should show it.
Between you and the seller, you can agree that the seller clears all arrears before completion and that you keep back part of the price until the corporation confirms nothing is owed. Do not rely on the seller's word. Use the certificate described below.
The Act also lets the corporation require an owner who rents out the unit to maintain a deposit with it, and to give written notice within seven days when a tenant moves in or out (section 43). If you buy a let unit, ask whether any such deposit or notice is outstanding. Landlords should read this alongside Condominium By-Laws and the Owners' Corporation.
What is the buyer's clearance letter, and how do I get it?
Ask for two documents before you pay the balance.
- The corporation's certificate. Under section 32(3), on the application of an owner or a person the owner authorises in writing, the corporation must certify the amount payable by the owner, the manner in which it is payable, a statement of account and the interest, if any, on any unpaid balance. Under section 32(4), the certificate is conclusive proof of the matters certified unless the contrary is proved. Your seller applies, or authorises you or your lawyer to apply.
- The managing agent's information. Under section 35, the managing agent must, on a written request and payment of the prescribed fee, give an owner, tenant or chargee information about the contribution due, any action against the corporation, unsatisfied judgments, written demands above one currency point, management agreements, the budget, insurance, the financial statement and the by-laws. It must do so within 21 days.
Ask that both documents are dated close to completion. Keep the arrears question out of the final stage by asking early, and mention it in the sale agreement. Our resale apartment guide shows where the clearance sits in the transfer, and the practical checks in Checklist: Inspecting a Second-Hand Apartment help on the visit.
Can the corporation charge interest, and what about disputes?
Interest is only allowed if the rules permit it, and only at the rate in the rules (section 33). Rules bind the corporation and every owner as if each had signed them, and they must provide for fines (section 29). They may be amended by special resolution, but an amendment takes effect only when the registrar registers it (section 29(2) and (3)).
If you think a charge or fine is wrong, start with the board and the managing agent, in writing. For fines, the Act lets a person aggrieved by the board's decision appeal to a court, where the corporation must show the rules were properly made (section 30(4) and (5)). A certified extract from the rules filed with the Registrar General is prima facie proof of their contents (section 30(7)). For a disputed contribution, a lawyer can advise whether to pay under protest, negotiate a schedule or defend a claim. Do not simply stop paying: the debt can grow, a charge can be registered and the problem becomes the next buyer's.
Keep in mind that the rules and the Act are separate documents, and the rules cannot restrict a transfer of a unit (section 29(4)).
How do arrears affect resale and renting?
Arrears can delay or stop a sale. A registered charge shows up on a title search, and a careful buyer's lawyer will ask for the certificate. Unpaid levies also starve the building: repairs, security and insurance are paid from the fund the corporation is supposed to maintain (section 20(1)), so a building with widespread arrears may also have poorer common areas. That affects the price a buyer will pay.
For landlords, the owner remains liable for the contributions on a let unit, and the Act lets the corporation recover from an owner or a tenant under the rules (section 32(1)). Check your lease and the by-laws to see who pays what. Foreign buyers should also look at tenure first, in Can a Foreigner Buy an Apartment in Uganda?. For shop and office service charges, see Mall and Office Service Charges in Kampala.
Thinking of buying a unit? browse apartment listings, and book an escorted site visit so you can ask the managing agent your questions on the day.
Frequently asked questions
Can a condo charge interest on unpaid service charge?
Only if its rules permit. Section 33 of the Condominium Property Act, 2001 says a corporation may charge interest at the rate set out in its rules if the rules allow. Ask for a copy of the rules and the corporation's certificate of any interest owing before you buy.
Do I inherit the seller's arrears?
You can be pursued for them. Section 32(2) allows recovery from the owner when the levy was passed and from the owner when the claim is filed, jointly and severally. A registered charge also stays on the unit. Get the corporation's certificate and have the seller clear arrears before completion.
How do I get a statement of arrears for a unit?
The owner, or someone authorised in writing, applies to the corporation, which must certify the amount payable, how it is paid, a statement of account and any interest (section 32(3)). The certificate is conclusive unless the contrary is proved (section 32(4)). Ask for a recent date.
Can the corporation put a charge on my unit?
Yes. Section 32(5) and (6) allow a corporation to present a charge against the title for an unpaid levied contribution, equal to the unpaid amount. It must withdraw the charge once you pay (section 32(7)). A title search will show it, so it can block a sale.
Sources
- Condominium Property Act, 2001 (Act 4 of 2001), sections 20, 29, 30, 32, 33, 35, 43, Ministry of Lands, Housing and Urban Development (accessed 2026-11)
- Condominium Property Act, 2001 (text), ULII (accessed 2026-11)