It’s that time of the year. The annual utility bill is here. Does it have mistakes? Find out the 15 common utility bill mistakes
Tenants tend to me scared of the annual utility bills. Fear of high back payments and fear of incomprehensible cost statements. It is precisely for this reason that tenants often avoid having to deal with their utility bill and pay the required amount without hesitation – no matter how unusual it is. However, utility bills mistakes are a common occurence in the annual utility billing.
- 1. The annual utility bill was late
- 2. Incorrect billing cycle
- 3. Deviation from the rental agreement is one the most common utility bill mistakes
- 4. Other operating costs
- 5. Incorrect allocation of heating costs
- 6. Other errors in the heating bill
- 7. Incomplete utility bill
- 8. Settlement of non-apportionable operating costs
- 9. One-time costs
- 10. Full maintenance contracts for elevators
- 11. Profitability of the billing
- 12. Own work by the landlord
- 13. Vacancy and condominiums
- 14. Commercial premises
- 15. The landlord does not bill
1. The annual utility bill was late
The landlord cannot take forever to settle the operating costs.
Section 566 (3) of the German Civil Code (BGB) stipulates that the utility bill must be received by the tenant no later than the 12th month after the end of the billing period.
For example, if the utility bill is for 2021, the billing period ends on December 31, 2021. The tenant must therefore receive the invoice no later than December 31, 2022. Access to the tenant is crucial for this. When the statement is thrown in the mailbox, it depends on the time. This is because access to the tenant is only accepted if the mailbox can usually still be expected to be opened on the same day. This is generally to be denied for throw-in after 7 p.m.
If the annual utility bill is late, the landlord can usually no longer make any claims. However, he still has to pay out a credit balance of the tenant.
In individual cases, the late receipt of the utility bill does not damage it, so that the bill still remains effective. This is the case if the landlord can prove that he is not to blame for the delay in billing. However, the landlord bears the risk of the longer postal route, so that he cannot invoke this.
2. Incorrect billing cycle
The period over which the landlord bills may not exceed twelve months. It is up to him whether the landlord settles from January 1st to December 31st or another period of twelve months. Accordingly, only costs may appear in the billing that actually occurred during this period. When and which costs were incurred can be traced on the basis of the receipts. The landlord must make the receipts available for inspection upon request.
3. Deviation from the rental agreement is one the most common utility bill mistakes
The rental contract regulates whether the tenant has to pay operating costs and how (flat rent or advance payments). The contract also regulates which operating costs are passed on to the tenant. Only these can then also be part of the service charge settlement. In any case, it is worthwhile to take another look at the contract.
In many contracts there is an exact list of the allocated operating costs. Sometimes, however, only the following clause is used: “In addition to the rent, operating costs are to be paid according to §2 Operating Costs Ordinance.” This is sufficient because the tenant can check exactly which costs are included here as well.
These are the costs that are mentioned in the Operating Costs Ordinance (BetrKV).
- Property tax costs
- Cost of a drainage system
- Labor costs for a caretaker
- Cold water costs
- Heat supply costs
- Hot water supply costs
- Costs for connected heating and hot water supply systems
- Costs for electricity and maintenance of an elevator
- Contributions for property and liability insurance
- Building cleaning and pest control costs
- Street cleaning and garbage disposal costs
- Electricity costs for lighting the communal property
- Sweeping fees for chimney sweeps
- Fees for cable connection or operation of an antenna system
- Cost of running a laundry room
- Garden maintenance costs
- Other operating costs (e.g. the costs for gutter cleaning, maintenance of smoke detectors, drinking water analysis, or the operation of outbuildings)
The landlord is not allowed to charge any other costs. The distribution key with which the landlord passes the individual operating costs on to the tenant is also specified in the rental agreement. Additional costs can be allocated depending on consumption, size of the household, area of the apartment or the proportion of residential units.
Billing based on consumption is particularly fair. If billing is based on residential units, the calculation for small households in apartment buildings can quickly turn out to be disadvantageous. If no allocation key is specified in the rental agreement, the additional costs must be settled depending on the living space (Section 556a, Paragraph 1 of the German Civil Code).
4. Other operating costs
The Operating Costs Ordinance lists 17 types of operating costs that the landlord can settle with the tenant. While the first 16 are clearly defined, point 17 only states “other operating costs […] that are not covered by numbers 1 to 16.”
It goes without saying that this position often leads to ambiguities or even disputes between tenants and landlords. What is certain is that landlords cannot arbitrarily pass on costs to their tenants as “other operating costs”.
In the rental agreement, it must be specified exactly which regular costs are to be billed annually under this item. In the case law, for example, the following positions have been recognized as “other operating costs”: costs for an alarm or video surveillance system or a doorman.
5. Incorrect allocation of heating costs
While the landlord is largely free to choose the key for the allocation of operating costs, he is bound by law when billing the heating costs. Thereafter, at least 50% of the heating costs must be allocated according to consumption.
The landlord must therefore equip the apartment with suitable measuring devices in order to be able to guarantee consumption-based billing.
Flat-rate heating costs or inclusive rents that are independent of consumption are not permitted for billing heating costs (BGH WuM 2006, 518). If the landlord does not adhere to this, the tenant may reduce the heating costs by 15%. (§ 12 – Right of reduction – HeizkostenV)
6. Other errors in the heating bill
In addition to the cost of fuel, the landlord can settle other items in the heating bill with the tenant. The costs for electricity, operation and maintenance of the heating system, sweeping fees and annual immission measurement by the chimney sweep, as well as the recording of consumption, can also be allocated in the heating cost bill.
If the system has to be repaired, these costs must not appear in the bill. However, some landlords try to bill repair costs as maintenance costs or other electricity costs as operating electricity. Tenants should pay attention to unusually high amounts.
7. Incomplete utility bill
The tenant must also be able to check the utility bill for correctness. The statement must therefore contain the following information:
- Billing period
- Distribution key
- List of the individual cost items
- Total amount of operating costs
- Share of the operating costs that the tenant should bear
- if necessary, details of the advance payments made by the tenant
If the tenant is unable to check parts of the utility bill due to missing information, the billing is incorrect. How tenants who receive an incorrect bill should proceed depends on the specific error in the utility bill and should be discussed with a lawyer.
8. Settlement of non-apportionable operating costs
Not all additional costs may be passed on to the tenant. As already mentioned above, what is particularly important is what the rental agreement regulates. But here too, individual provisions can be ineffective.
Non-apportionable ancillary costs cannot be converted into apportionable costs by an agreement in the rental agreement. Administrative activities as well as maintenance or repair measures, for example, may not be passed on to tenants.
9. One-time costs
The operating costs only include costs that are regularly incurred in the operation of the building. One-off costs, on the other hand, cannot be passed on to the tenants.
Correspondingly, vermin control, repair costs, administration costs, loss of rent or legal expenses insurance, postage or bank charges may not appear in the ancillary costs statement.
10. Full maintenance contracts for elevators
While the landlord can pass on the costs incurred by operating an elevator to the tenant, costs for repairs or spare parts must never appear in the utility bill.
Operating costs of the elevator are, for example, electricity, operation, monitoring, supervision, emergency calls and cleaning. However, things get complicated when the landlord has signed a so-called full maintenance contract for the elevator. Such a contract includes costs for possible repairs and must accordingly be deducted from the settlement with the tenant.
Tenants who cannot use the elevator, for example because they live in another part of the building, do not have to bear any elevator costs.
11. Profitability of the billing
Section 556 of the BGB not only regulates that the landlord may pass the operating costs on to the tenant. Here it is also stipulated that the landlord has to pay attention to profitability with the operating costs.
This means that the landlord cannot spend the tenants’ money indiscriminately, but rather that he has to compare prices and not generate unnecessary costs. Accordingly, he should not take out nonsensical insurance, make unnecessary purchases or pay excessive salaries to cleaning staff or caretakers.
An operating cost table can be used to estimate whether the amount of individual ancillary costs is appropriate. The operating cost table shows the average amount of the various ancillary costs per square meter.
12. Own work by the landlord
According to the Operating Costs Ordinance, the landlord may also settle his own material and work services with the tenants. This means that the landlord can, for example, lend a hand himself instead of hiring a gardener, caretaker or cleaning service.
The landlord can then invoice the tenants for these expenses. However, the landlord may not charge huge sums, but only has the right to charge costs in the amount that a craftsman or service provider would have asked for the same activity.
If the tenant has justified doubts about the amount of the costs, it is up to the landlord to explain his expenses.
13. Vacancy and condominiums
When calculating ancillary costs for a house, all apartments must be counted. Vacant apartments and condominiums must therefore be included in the total costs in the same way as rented apartments. In the case of vacant apartments, the owner must bear the costs proportionately.
If a lower total number of square meters appears in the utility bill in a year than in the previous year, this may be because the landlord only billed for the rented apartments in order to save costs.
14. Commercial premises
For commercial spaces, such as offices or shops, the operating costs are usually higher than for private households. For example, more water is often used in businesses, heating costs and waste disposal costs can be higher and property tax is higher.
If the tenants have to pay more than 15 percent more operating costs because of the commercial units in the house, the landlord is obliged to show apartments and businesses separately in the statement.
15. The landlord does not bill
While some tenants receive high demands for additional payments with their utility bill, other tenants do not receive any bills at all.
If the tenant has accumulated a credit due to high prepayments, which the landlord would have to repay to the tenant after the settlement, lan
dlords are trying not to create an invoice in order not to have to distribute the credit. However, the landlord is obliged to prepare an annual statement of the operating costs if he asks the tenant to pay the costs in advance. Tenants can even sue for their right to a utility bill.