Operating costs: Check your bills and save money!

Before conducting an in-depth analysis of the utility bill, the tenant should check whether there is any provision regarding operating costs in the rental agreement. If the lease does not contain any provisions in this regard, the landlord must bear all costs except for heating costs and costs for services commissioned by the tenant, such as electricity and gas (Section 535 (1) sentence 3 BGB, Section 2 HeizkostenV) – in this case, passing these costs on to the tenant is not permitted.

The billing of certain operating costs is also inappropriate if a flat rate for the corresponding costs has been agreed in the rental agreement (Section 560 BGB). In this case, the tenant only owes the agreed flat rate. However, a flat rate can only be agreed for operating costs that are not required by law to be billed on a consumption basis (Section 556a (1) sentence 2 BGB, Sections 2, 4ff. HeizkostenV).

In order to better understand when and for what a supplementary payment would have to be made as a tenant, it is worth looking at the three possible rental structures and classifying your own tenancy accordingly. The most common case is the so-called “net rent” arrangement.

Once a specific rental structure has been agreed upon, it must generally be maintained. However, before the start of a new billing period, the landlord may declare to the tenant that the operating costs will in future be allocated in whole or in part according to a scale that corresponds to the different consumption/different causes of the tenants (§ 556a (2) BGB). If the costs were previously included in the rent, the rent must be reduced accordingly. In the case of a net rent, the landlord may also switch from a flat rate to an advance payment arrangement.

If, despite provisions regarding the allocation of operating costs in the lease agreement, there are no provisions regarding a flat rate or an advance payment obligation, the landlord may nevertheless settle the agreed operating costs and allocate them to the tenant.

The utility bill must be issued in so-called text form (Section 126b BGB), i.e., it can also be sent by email. The law requires that the bill be comprehensible and contain an “orderly compilation of income or expenses” (Section 259 (1) BGB). The tenant must be able to check the compilation of costs and the calculation of the share (so-called transparency requirement).

The following information must be included in a utility bill:

• Addressees: Name of the correct tenant/shared apartment
• Date of creation: The date must be specified accordingly.
• Subject of the invoice: Name of the rental apartment.
• Total costs: These must be clearly listed. The total costs must be stated for each type of ancillary cost.
• Distribution key: The keys must be named and explained. This can be done, for example, using the term “living space” if the allocation is to be based on living space.
• Tenant's share of costs: The tenant's share of the total costs must be specified.
• Billing period: The statement must indicate the period for which it applies. The billing period may not exceed 12 months.
• Billing or economic unit: It must be clear to which building(s) the statement refers and whether several buildings are billed together.
• Advance payments: Advance payments made by the tenant during the billing period must be deducted from the total costs. Advance payments for operating costs may only be agreed upon in reasonable amounts (Section 556 (2) sentence 2 BGB).

The statement of additional costs must be received by the tenant no later than the end of the twelfth month after the end of the billing period, i.e., regularly no later than December 31 of the following year (Section 556 (3) sentence 2 BGB). In accordance with the principle of uniformity, a billing period must always be considered as a whole, i.e., several bills may not be issued within one year.

If the landlord does not settle the bill by the specified deadline, the landlord can no longer claim any additional payments. The tenant nevertheless has the right to receive a statement of operating costs and to be paid any credit balance. If they do not receive a statement, they can take legal action to obtain one.

The tenant has 30 days from receipt of the statement to respond to any additional claims made by the landlord, i.e. to either pay them or object to them (Section 286 (3) BGB). In addition, the tenant may raise objections within 12 months, even after payment has been made (Section 556 (3) sentence 5 BGB, known as the objection exclusion period). If the tenant then receives an amended statement, this period begins to run again upon receipt, but only with regard to the changes made.

The tenant can also assert a right of retention if they request access to the settlement documents within 30 days (Section 273 (1) BGB in conjunction with Section 556 (4) sentence 1 BGB). The tenant can then retain the additional amount until the review is complete. In the event of a credit balance, the tenant is entitled to have this paid out. The landlord must comply with this claim within 30 days. Alternatively, the tenant can also offset the credit balance against upcoming rent payments (Section 387 et seq. BGB).

The above deadlines for the tenant assume that the bill is formally valid, i.e., that all of the above formalities for the utility bill have been complied with.

Which costs in the operating costs statement can be passed on by the landlord to the tenant—i.e., must be borne by the tenant—depends on whether

1. the costs could in principle be passed on from a legal perspective and
2. the lease specifically stipulates that the costs should be allocated to the tenant.

In other words, the law allows certain costs to be allocated to the tenant. However, whether these costs may actually be allocated to the individual tenant depends on the specific provisions of the lease.

Operating costs that are already specified in § 2 of the Operating Costs Ordinance (BetrKV) do not have to be listed individually in the lease agreement—a reference to the paragraph is sufficient. However, operating costs that are not specified in the law and are classified as “other operating costs” (§ 2 No. 17 BetrKV) must be listed individually. These can include, for example, security services and gutter cleaning. It is not sufficient to stipulate in the rental agreement that the tenant must bear “all” or “all legally permissible ancillary and operating costs.” A provision stipulating that the tenant shall bear the costs “in accordance with the decisions of the apartment owners” is also too vague.

From a legal perspective, costs that are generally apportionable are those “incurred on an ongoing basis by the owner or leaseholder as a result of ownership or leasehold rights to the property or through the intended use of the building, outbuildings, facilities, equipment, and land” (Section 556 (1) BGB, Section 1 BetrKV). Ongoing costs are those that arise on a specific (possibly multi-year) cycle/regular basis (e.g., elevator inspections, tree pruning, calibration costs for water meters). This also includes the owner's or leaseholder's own material and labor services.

However, maintenance and repair costs and administrative costs are not apportionable (Section 1 (2) BetrKV). If an operating cost item that is actually apportionable includes a repair, maintenance, or administrative component, this must be excluded from the calculation. Conversely, administrative costs are apportionable in exceptional cases if they are expressly designated as apportionable by law (e.g., billing costs pursuant to Section 2 No. 8 BetrKV). Rental or leasing costs are also only apportionable if this is expressly stated by law, for example in the case of water meters. Furthermore, the purchase of operating resources is generally not apportionable. This also applies if the purchase could save higher – apportionable – external commissioning costs (example: non-apportionable purchase of a lawn mower instead of a more expensive but apportionable gardening service). Finally, costs incurred for superfluous or inappropriate measures, for example because the landlord has neglected the rental property, may not be apportioned (so-called principle of economic efficiency).

The following table provides information on whether individual costs are apportionable or not:




If additional costs are incurred during the tenancy, a distinction must be made with regard to their apportionability: If operating costs are to be reallocated which were specified as operating costs in the rental agreement (or which are specified in the Operating Costs Ordinance referred to in the agreement) but which have not yet been incurred and therefore have not been reallocated, reallocation is possible without special agreement. If, on the other hand, the new operating costs are based on statutory additions to the list of operating costs in the Operating Costs Ordinance (e.g., new smoke detector requirement), the apportionment requires a so-called “additional cost clause” in the lease agreement, according to which such costs that were not known at the time the agreement was concluded are also to be borne by the tenant.

Ancillary costs incurred during the period of vacancy of the apartment cannot be allocated. The vacancy must be shown in the statement of account. In addition, the unoccupied living space may not be excluded from the total area of the building if the living space is used as the allocation key.

Unlike costs for heating and hot water, so-called cold operating costs may also be billed according to the “cash basis” principle—i.e., in the billing period in which they became due to the landlord.

Errors in the operating cost statement may not only consist of costs being allocated in an impermissible manner, but also in the way in which the costs were allocated. The allocation of costs must be carried out using a so-called allocation key or distribution key. This refers to the standard according to which the individual tenant contributes to the total costs of the whole (example: residential building).

The following allocation keys, among others, can be considered:

1. Number of people in the household: The current occupancy of the apartment is decisive here. This can be useful if the number of people suggests higher costs, e.g., for garbage disposal.
2. Cubic meters of enclosed space: This can be a fair measure if the apartments in the building have very different heights.
3. Residential unit: This key is useful if the services for which costs have been incurred benefit all residential units equally.
4. Consumption: Consumption-based billing is mandatory for heating and hot water costs. At least 50% and at most 70% of the costs must be calculated on a consumption basis (Section 7 (1) sentence 1 HeizkostenV). If billing is nevertheless carried out on a non-consumption basis, the tenant may reduce the costs by 15% (Section 12 (1) sentence 1 HeizkostenV). Cold water only has to be billed based on consumption if water meters are installed throughout the entire residential area; otherwise, allocation based on living space (Section 556a (1) sentence 1 BGB) is possible.
5. Co-ownership share: This is the same key that is used for the owner's service charge settlement.

The principle of transparency requires that the allocation formula be understandable—in case of doubt, a brief explanation in the statement of account is required.

The allocation key can be specified in the rental agreement. If there is no provision for the allocation key in the rental agreement, the allocation must be based on square meters of living space (Section 556a (1) sentence 1 BGB). Once an allocation key has been agreed, it must generally be retained. A combination of several allocation keys is also possible. Depending on the billing item, a different allocation key may be used.

The allocation key should be both practical and fair (equity). This is usually the case with the above-mentioned recognized allocation keys. If, on the other hand, a less common allocation key is used, the landlord must be able to explain why it is still fair. If the tenant doubts the correctness of the apartment size used by the landlord as the distribution key, they must prove that the area is incorrect and carry out a survey (as offered by some tenants' associations).

An indication of the unfairness of an allocation key may be the (surprising) amount of the operating costs item, for example, compared to previous years in which a different allocation key may have been used. Guidance on expected cost levels for Berlin is provided by the Senate Department for Urban Development in its publication Berliner Betriebskostenübersicht.