Are you a condominium owner and wondering whether you can apportion the house charges to the tenants? Basically, there are apportionable costs that you do not have to bear yourself. We explain to you which costs are apportionable and what you should pay attention to.  

Cost factor house allowance: What is the house fee and who has to pay it?

The service charge is a type of service charge for condominium owners. It is used to cover the common costs for the care, maintenance and administration of the entire building. The house allowance is paid each month in advance to the account of the homeowners' association (WEG). The amount of the house allowance depends on various factors, such as the size of the property, the age of the building and the number of residential units. Once a year, there is a statement of charges.

The housekeeping bill

The annual statement of charges is prepared by the property management company and provides information on all financial transactions in the homeowners' association. At the end of the year, it is settled whether more or less money was spent than planned. It therefore shows in detail what income was generated through payments of the house allowance. The development of the maintenance reserve is also shown. At the end of the property management statement, it is determined whether the owners will receive money back or have to make additional payments.

Apportioning house charges to tenants: The legal basis for apportionable house charges

If you, as a condominium owner, want to pass on the house fee to the tenants, you need to consider two points: firstly, your obligation to pay the house fee to the condominium owners' association, and secondly, the possibility of passing on part of the house fee to the tenants if you have rented out your property.

The house allowance: The legal basis for condominium owners

As a condominium owner, you are obliged in accordance with § 16 para. 2 sentence 1 of the German Condominium Act (WEG), you are obliged to contribute to the costs of the WEG in accordance with your ownership share. You can find the most important information on this topic in our article on house charges.  

The legal basis for apportionable house charges

According to Section 556 of the German Civil Code (BGB), landlords and tenants may agree that the latter will bear the operating costs (ancillary costs) of their rented apartment. If such an agreement is included in the tenancy agreement, part of the house charges may be passed on to the tenants.

Which costs of the house charges are apportionable?

As you can see from Section 556 BGB, there is an important prerequisite for certain costs of the house rent to be apportionable: They must arise regularly. In this case, you can apportion the house expenses to tenants. However, there are also costs that are incurred regularly and are nevertheless not apportionable or are disputed, such as the removal of graffiti. 

Apportioning house charges to tenants: Observe the rental agreement, operating costs ordinance and heating costs ordinance

The actual costs that can be allocated are primarily governed by the rental agreement between the landlord and tenant.

You may only pass on to tenants those expenses that are explicitly listed in the tenancy agreement. Here there is usually also a reference to the currently valid version of the Operating Costs Ordinance and Heating Costs Ordinance. The Operating Costs Ordinance is used as a guideline to determine which parts are generally apportionable. For example, many tenancy agreements contain wording such as "The tenant shall bear the ancillary costs in accordance with Section 2 of the Operating Costs Ordinance".

However, this does not mean that all costs specified in the ordinance may automatically be passed on to tenants. Rather, these costs must always be specifically named in the tenancy agreement. If you are unsure whether and which costs of the house charges are apportionable, it is always worth taking a look at the Operating Costs Ordinance and Heating Costs Ordinance. 

In particular, the following regularly incurred expenses can be passed on to the tenants:

1. Current public charges on the property, for example property tax
2. Water supply costs
3. Costs of house and property drainage
4. Costs for central heating systems
5. Costs for central hot water supply systems
6. Connected heating and hot water supply systems
7. Costs at the passenger and freight elevator
8. Costs of street cleaning and waste disposal
9. Costs of building cleaning and pest control
10. Costs for garden maintenance
11. Costs for the lighting
12. Costs for chimney cleaning
13. Property and liability insurance
14. Costs for the janitor
15. Costs for the community antenna system
16. Costs for laundry care facilities
17. other operating costs within the meaning of § 1

There are a total of 17 apportionable cost items from the house allowance that can be easily passed on to the tenants.

Even if the Operating Costs Ordinance is mentioned in the tenancy agreement, it does not necessarily have to be included as an appendix. It is sufficient if the cost items mentioned in the contract comply with the regulations of the ordinance. However, it is important that you do not use blanket formulations, but instead specifically name all apportionable parts of the house charges. A formulation such as "The tenant shall bear the ancillary costs" is too imprecise and does not give the tenant sufficient clarity as to which costs he/she will actually incur."

Tip: Even if the property tax is not included in the property charges, it can still be passed on to the tenants via the service charge bill.  

Which housing costs cannot be passed on to the tenants?

However, not all costs that are part of the house rent are apportionable. This means that certain items cannot be passed on to the tenants. These are expenses that are related to the letting but are not directly connected to the tenant's management of the apartment.

These include, for example, the maintenance reserve, which is to be saved for major repairs or modernization measures. These items are usually invested separately by the owners in a joint account. 

Maintenance and renovation costs such as painting or roof repairs cannot be included directly in the apportionable costs. In addition, there are administrative costs such as account fees for the WEG account and costs for property management. These must also be borne and settled separately by the owners. It is important that the relevant resolutions are passed at the owners' meeting and that a clear arrangement is made as to how these costs are to be distributed.

Note: The apportionable house fee with all cost items is set out in the operating costs catalog of §2 BetrKV.

Passing on special charges to tenants?

Special allocations are generally not apportionable. This additional cost type is used to finance measures such as extensive renovation work or the purchase of new communal facilities. As a rule, these costs are also incurred when unforeseen or particularly costly measures arise.

If you, as the owner, have to incur major expenses that cannot be covered by the regular house allowance, you may levy a special apportionment. The decision on a special levy is usually made at your condominium owners' meeting. You must pass a resolution determining the amount of the special allocation and the use of the funds. The basis for calculating the special allocation is a detailed cost plan.

In these cases, a special allocation is usually decided:

• There is not enough money in the housekeeping account because the economic plan is calculated too tightly
• There are major purchases to be made for the property, but the maintenance reserve is not sufficient for this
• Co-owners have not paid the house rent. The special apportionment then serves to compensate for these shortfalls in house fees

What to do if the costs for special levies are too high?

A special levy can be a financial challenge for individual owners. If an owner is unable to pay his or her share of the special apportionment despite all efforts, there may be legal consequences. To avoid this, it is advisable to seek a solution at an early stage. Through open discussions and a certain degree of flexibility, solutions can certainly be found that are fair to everyone. In order to keep the homeowners' association together, it is important to address individual situations.

In particularly serious cases, it may be necessary to clarify the ownership situation, i.e. to sell the residential unit in order to meet the payment. However, this should always be seen as a last resort.

House rent in the event of vacancy: What applies?

Even if a condominium is vacant, the owner must continue to pay the house rent. This applies regardless of the condition of the condominium. However, repayments may be made in the annual statement if certain costs are billed according to consumption.

House fees often lower for new builds

In the first few years after the completion of a new apartment, the house fees for new builds are generally lower. This is because there are usually no major maintenance costs during this phase. Structural defects are rectified by the developer during the warranty period and the building fabric is still very new. However, the costs can increase over the years when the first major maintenance measures are due.

Deducting house expenses for tax purposes

As the landlord/landlady of an apartment, you can deduct part of your housing costs from your taxes. Costs that you bear yourself and do not pass on to your tenants are considered income-related expenses. However, only amounts that have already been spent are deductible. This means that you can only claim your maintenance reserve once the property manager has actually used it.

House charges apportionable: How high is the house fee?

You already know the apportionable costs, but how much of the house expenses are actually borne by the tenants? As a rule, it can be said that around 60 percent of the house rent consists of apportionable costs that you can pass on to the tenants.

However, this can vary significantly depending on the homeowners' association, as the following two examples illustrate:

- If the property is well insulated, the landlord saves money and costs are reduced.

- If the property needs to be renovated soon, the house rent may increase because the owners are currently saving up maintenance reserves.

Conclusion Apportioning the house rent: What you need to know

The service charge allows landlords to pass on certain expenses incurred in connection with the management of a property to the tenants. These expenses include, for example, costs for water, heating, refuse collection or janitor services. By distributing the items in this way, each tenant pays a fair share.

It is important for landlords to carry out the billing of service charges transparently and correctly in order to avoid legal disputes and strengthen tenants' trust. Tenants, on the other hand, benefit from a clear presentation of service charges, which helps them to better plan their monthly expenses.

Keeping an eye on all apportionable costs - Ralph helps you with that

As a homeowners' association, it is advisable to always keep an eye on the house fees and be aware of the costs involved. Transparent communication and good property management can be helpful here - also to avoid any disagreements and to maintain a harmonious community of owners.

Compared to traditional property management, at Ralph we use modern software and digital platforms to automate and simplify administrative tasks. This makes the property management process faster and more efficient. We also place great emphasis on our customer service and offer solutions tailored to the needs of apartment owners. Feel free to check out our property management costs to learn more about us.

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