Service charge settlement: These rights & obligations apply

Every tenant knows it: the annual service charge statement arrives in the letterbox and there is the worry that you will have to pay a lot of extra money. However, very few tenants are familiar with the legalities of the service charge statement. However, there are a number of deadlines and rules to be observed by both tenants and landlords when it comes to settling service charges correctly. Read on to expand your knowledge and find out what you need to bear in mind when settling service charges

What is a service charge statement

The service charge settlement can be used to settle service charges that have to be paid to the landlord by the tenant of a property over a period of one year. The service charge statement must be issued once a year, provided that the tenant has already paid advance payments of the service charges within the settlement period. 

The service charge statement provides information about which service charges can already be covered by the advance payments and which costs still have to be paid by the tenant. 

What does a service charge statement look like?

There is no template that landlords have to follow when preparing the service charge statement. Rather, you can use sample templates from the internet and should make sure not to forget the following important information in the written statement: Settlement period, total costs, distribution key, tenant’s share of operating costs, advance payments made by the tenant. 

The settlement period

According to section 556 of the German Civil Code (BGB), the settlement period may not exceed 12 months. 31 December is then usually also the end of the settlement period. It may also come down to a shorter settlement period for the service charge settlement, namely in the event that tenants change within a year. 

Overview of the total costs

The service charge statement lists all cost types that the tenant has to pay. In addition, it is important to first list all the total costs of the individual cost types incurred for the flat. Only in the next step do these total costs have to be broken down to the addressed tenant. 

The distribution key or apportionment key 

The apportionment formula indicates the ratio in which the total costs are to be apportioned to the tenant. The allocation key is usually stated in the tenancy agreement. Otherwise, it must be calculated in relation to the living space, i.e. according to square meters. 

If landlords do not want to apportion the costs according to living space, they can specify one of the following other apportionment keys in the tenancy agreement:

  • Number of persons
  • Number of living units
  • Consumption
  •   Proportion of living spac

Which apportionment formula can be selected depends on the type of costs involved. For example, the number of persons can be used to calculate waste charges. On the other hand, it makes sense to calculate the service charges for cable connections or property tax on the basis of the number of residential units. The service charge allocation key according to consumption is used when heating costs have to be paid. The distribution key according to living space, on the other hand, is useful for sewage costs. 

The landlord needs the consent of all tenants to change the distribution key that was stipulated in the contract. However, general consent is seldom given, as a change of key may entail higher costs for the tenants. Thus, when setting the allocation key in the tenancy agreement, landlords should be sure that they have chosen the right one. 

Calculation of the tenant’s share of the operating costs

The tenant’s share of the service charges depends on which distribution key has been selected. Let us illustrate the situation with a simple example: 

  • The total costs for the house lighting in a shared apartment are 60 euros in the period under consideration.
  • There are 6 accommodation units
  • Billing is based on the number of dwelling units

Accordingly, the respective tenant must pay one sixth of the costs. The operating cost share for the house lighting is 10 euros per tenant. 

Deduction of the advance payments made

If the ancillary costs are clearly presented, they are offset against the sum of the advance payments that the tenant may already have made. This results in an amount to be paid, which the tenant must ultimately transfer to the landlord in due time. 

What service charges tenants have to pay

In addition to the agreed basic rent, tenants must also pay operating costs associated with living in the rented flat. When using the flat, a wide variety of costs are incurred that the landlord can pass on to the tenants. Parmi les charges récupérables, on trouve notamment : 

  • Property tax
  • Frais d’eau chaude
  • Heating costs
  • Sewage charges
  • Operating costs of the lift
  • Street cleaning, Waste disposal Building cleaning
  • Electricity costs of the common rooms
  • Cleaning costs of the common areas
  • Maintenance costs of the common areas Chimney cleaninge
  • Property insuranc

Typical errors in the service charge settlement

Incompleteness of the service charge statement

The statement must contain the following points: 

  • Settlement period
  • Overview of total costs
  • Distribution key
  • Cost share of the tenant
  • Advance payments made 

However, some landlords make the mistake of neglecting basic information. However, tenants are obliged to check the statement and report any errors to the landlord immediately. If not all information is provided, the tenant is deprived of the opportunity to check. 

Invalidity due to deviations

The tenancy agreement specifies how operating costs are to be paid by the tenant. The respective types of costs and the distribution key are specified in the tenancy agreement. If the landlord’s details in the service charge statement deviate from the agreements previously made, the statement is incorrect. 

Late access

Another mistake landlords make when issuing the service charge statement is to disregard the deadline. The tenant must receive the statement no later than 12 months after the end of the settlement period. If the receipt of the service charge statement is delayed, the landlord is no longer entitled to the additional payment of the service charges. 

Unlawfully high service charges

In the event that the landlord submits a service charge statement that seems too high to the tenant, it is advisable that the tenant initially pays the additional payment on time despite the doubts. If the tenant does not pay the arrears within the deadline, this may constitute grounds for termination by the landlord. Another option available to the tenant in this situation is to lodge an objection or demand to see the landlord’s bills.