Check service charge settlement & avoid errors - this is how you keep an overview

At the end of each year, tenants receive their utility bills. But which ancillary costs can be charged? And where are there often errors? You can find the answers here.

service charge statement

Every year it arrives in the mailbox - the utility bill. The result is usually skepticism, a deep sigh and, given the current development of prices, high additional payments. But with the horrendous operating costs that apartment users are expected to pay each year, formal errors occasionally creep in. Therefore, you should take a close look at your service charge statement: Are the listed costs allowed to be charged? Have costs increased noticeably compared to the previous year? Or have there been any additional costs that you are not aware of?

Take a close look at your statement. Then you will understand the cost breakdown exactly and can check whether errors have crept in. Put your skepticism aside. Save time next year to understand - and check - your utility bill.

The most important technical terms

Whether you are a tenant or an owner - as long as you live in an apartment, you will receive your annual service charge statement. But before we clarify which deadlines actually apply or when a statute of limitations takes effect, we clarify the most important terms. Are you familiar with them? Then skip ahead to the next paragraph, "Service charge statement: what, when & how?

  • Service charges: Service charges are incurred in addition to the main rent for a property. Operating costs such as heating costs, water consumption or facility management (building cleaning, garden maintenance, etc.) are included. Check your rental agreement to see exactly what the agreement on operating costs states - in accordance with Section 556 in the German Civil Code (BGB).
  • Advance service charge payment: The advance service charge payment is an amount payable monthly to cover anticipated service charges. At the end of a billing period, this is offset against the actual service charges. Make sure that your advance payments are indicated on the statement. Otherwise, this is formally invalid.
  • apportionable: The utility bill lists janitorial costs, but not rental management. Why? There are expenses that an owner can apportion to its tenants under tenancy law. Other operating costs are not apportionable. The Federal Court of Justice (BGH) has defined exactly what these are in several rulings.
  • Dwelling unit: A unit that can be inhabited independently: An apartment, apartment, or house. A property may consist of several dwelling units.
  • Allocation key: The allocation key determines how the total costs of the ancillary costs of a property are distributed among the residential units. For this reason, the apportionment key is often also called the distribution key. The respective share is determined according to living space, number of persons or co-ownership share. The corresponding factor must be indicated on the service charge statement.
  • Settlement period: The settlement period defines from when to when operating costs are settled. This is often also referred to as a billing period. The period covers 12 months. The landlord or owner must observe a settlement period of 12 months of the following year.
  • Objection period: If tenants discover an error on their service charge statement, they have a period of up to 12 months after delivery of the statement to object.

Service charge settlement: what, when & how?

The utility bill contains the annual statement of operating costs that an owner allocates to occupied units. Typically, the lease agreement lists the specific costs in detail. This is not the case for you? Alternatively, you might find a reference to Section 2 of the Operating Costs Ordinance.

Apartment users often hold the statement in their hands with mixed feelings: The additional payment is unexpectedly high, some cost items are too opaque, the allocation key is not explicitly noted. If you as a tenant want to understand and check the service charge statement, a good template is worth its weight in gold. You can recognize errors more easily and understand which costs are actually incurred.

Download sample document operating costs statement

What is a service charge statement?

Service charges and operating costs mean the same thing: recurring costs incurred by the property owner through use of the residential units. § Section 556 of the German Civil Code (BGB) states that the owner may pass on some of these costs to tenants. The expenses are incurred in addition to the cold rent, which is why the ancillary costs of living space are often referred to as "second rent".

The service charge statement for tenants now lists the total costs of the house and apartment. If you live in an apartment building, it is particularly important that the share is broken down per rental unit. Have you made an advance service charge payment? Depending on the statement, you may now have to make an additional payment or receive a refund due to low consumption.

What are the deadlines?

Every service charge settlement must reflect a settlement period. In most cases, this period is 12 months. This can be either the calendar year or the start of the respective rental period:

  • By when must the landlord notify the tenant of the service charge statement?
    After the settlement period, the owner has 12 months of the following year to send a statement to the occupant of the apartment. This regulation is binding. Consequently, it cannot be adjusted individually by contract. If necessary, corrections may be made to the statement during the 12 months. If the landlord does not comply with the settlement deadline, the operating cost settlement is no longer legally binding.
  • By when must the service charge statement be paid by the occupant of the apartment?
    If the statement is in the mailbox, the additional payments must be paid within 30 days. If you suspect that errors have crept in, you can pay the operating costs with reservation. You have a total of one year to review the service charge statement and file an objection if necessary.
  • What can the tenant do if the landlord does not issue a service charge statement?
    Apartment users have the right to see the service charges in a statement. If the landlord or owner does not issue an operating cost statement, the apartment user should exercise the right of retention. This means that the tenant does not have to pay any advance service charges until the utility bill is issued.

In general, apartment users and landlords or owners are bound by the statute of limitations: It specifies the time frame within which claims from the statement can be asserted. This amounts to three years after the statement has been issued. For the landlord, this means that he must claim any additional payments from the tenant within this period. The tenant can claim back any overpaid amounts within this period. After the three years have elapsed, such claims are time-barred. As a rule, they can no longer be asserted.

How is a service charge statement structured?

In addition to the deadlines, formal requirements must of course also be met with the statement. At first glance, the cost breakdown in the statement looks rather detailed. In fact, however, the statement should be set up in such a way that the total costs are easy to understand. For this purpose, the values are usually arranged in tabular form. The columns break down operating costs such as heating, water and electricity consumption, maintenance or janitor costs. A template or sample can help you to orientate yourself on the document.

First of all, look for the billing period. You should also be able to see the apportionment key, your own share of the costs and the advance payments already made. For the allocation key, for example, you can find information such as "apartments by area in m2" on the statement.

Better safe than sorry: understand & check billing

As already mentioned, you have 12 months after receipt to check the service charge statement. If you discover any errors, you can dispute any additional payments.

You can check your service charge statement with our checklist:

  • The service charge statement appears clearly
  • The billing period is recognizable & correct
  • The billing deadline was met by the payer
  • The cost points are listed transparently
  • The total cost is called
  • The distribution key is communicated
  • The own contribution to the total costs is evident
  • The costs are calculated according to the living space specified in the lease in m2
  • The apportionment of operating costs is correct (the listed payments are apportionable)
  • Advance payments made are noted

Better safe than sorry: understand & check billing

When do tenants turn to the property management? Mostly when something is broken in the apartment ... or unexpected payments are not transparent. So the service charge statement can be a point of friction that repeats itself every year. To alleviate stress, we now show you common errors in service charge statements. These can happen - unintentionally - all the time. But as an apartment user, you can also uncover potential savings.

Which ancillary costs may be settled?

The BGH has precisely defined which ancillary costs can be apportioned to tenants or apartment users. Several decisions define:

  • Garbage collection & control of waste separation
  • Maintenance such as the control of smoke detectors
  • Operating costs via heating, electricity and water consumption
  • Building cleaning, garden maintenance, irrigation & drainage
  • Janitor costs - ATTENTION: If the janitor takes over additional work such as cleaning or garden maintenance, these operating costs may not be listed additionally
  • Road maintenance & tree cutting work
  • House lighting
  • Elevator costs
  • Cost of a chimney sweep
  • Property tax
  • Property & Liability Insurance
  • Other operating expenses

In summary, the landlord may allocate recurring costs that contribute to the proper use of the living space.

Which incidental rental costs are not apportionable?

This is a question that tenants often ask. Operating costs that may not be apportioned include:

  • Maintenance & repair costs
  • Administrative expenses
  • Acquisition costs, e.g. for garden maintenance
  • Real estate transfer tax or income tax
  • Depreciation charges
  • Legal protection
  • Home insurance

Are you still unsure whether your billing is correct? Have it professionally checked within the 12-month objection period. We are also sure: Your property management company will be there to answer any questions you may have. In order to always be available for you, EichenGlobal works with an online portal and ticket system, for example. This way, no inquiries go missing and we can provide support as quickly as possible.

Checking the service charge statement: The most important things summarized in 6 sentences

Because the service charge settlement usually seems complicated enough, we summarize the most important things in a nutshell. You will notice: Once understood, you can quickly control your operating costs. Here we go:

The service charge statement - also called operating cost statement - is an annual statement of the total costs of a property. It summarizes the ancillary costs for a settlement period of 12 months. It shows how the operating costs are distributed among owners and individual residential units. If you have a service charge statement in your hands, check whether the listed cost items are apportionable and correctly calculated. It is particularly important that formal data is shown transparently. This includes, for example, the settlement period, any advance service charge payments made, or the apportionment formula.