Contact Ralph
What happens if the service charge statement is issued too late? It is an important part of your duties as a landlord to send the service charge statement to tenants on time. If landlords allow themselves too much time, they may be left with the costs. What are the consequences of a late utility bill for you and your tenants? And what rulings are there on the subject?
In this article, we will look at this in detail. We will show you the possible consequences of a late service charge statement and use judgments to illustrate the rights and obligations you and your tenants have in such situations.
How are ancillary costs billed?
Service charges, usually also referred to as operating costs, include all costs incurred by the landlord in owning and managing a property. These include, for example, property tax, electricity costs, costs for water consumption or charges for refuse collection.
The tenancy agreement can stipulate how the tenant is to bear these costs. It is common practice, for example, for the tenant to pay a flat-rate service charge in the form of a fixed monthly lump sum or an advance payment in which the costs are paid monthly in advance. In the case of a flat-rate service charge, no statement is drawn up. In the case of advance payment of service charges, the landlord is obliged to prepare and submit an annual statement of operating costs.
The statement shows the tenant's consumption during the billing period and the landlord's actual costs. If there is a credit balance for the tenant, he or she is entitled to a refund. If the costs exceed the advance payments, the landlord has a claim to subsequent payment.
What is the deadline for the service charge settlement?
The following deadlines apply to the service charge settlement: In the case of advance payments, the tenant is entitled to a timely and proper settlement. The billing period is one calendar year. However, depending on the agreement, the billing period can also begin when the tenant moves into the apartment.
The statement must be sent to the tenant within one year of the end of the billing period. This deadline is binding and cannot be extended.
Please note: There is an exception to the one-year deadline if the landlord is not responsible for the delay. More on this later.
You can find a detailed explanation of the deadlines in our article on service charge settlement deadlines.
These are the consequences of late billing
If the service charge statement is drawn up in good time, the landlord/landlady can assert additional claims if the advance payments already made by the tenant do not cover the actual operating costs. However, if the landlord misses the statutory deadline, he or she loses this right.
This means that the tenant does not have to make any additional payments if the service charge statement is late. Nevertheless, the landlord is still obliged to prepare a service charge statement. If the tenant has paid too much in advance, the excess amount must be refunded to him or her.
Landlord bears responsibility for late settlement
In principle, the landlord is obliged to obtain all necessary documents for the preparation of the service charge statement in good time. If he/she commissions third parties, he/she must ensure that they process the documents on time.
It is therefore not enough to simply wait until the required documents arrive. In such cases, the so-called burden of presentation and proof lies with the landlord. He/she must be able to prove that the delay was not caused by his/her own fault.
Relief is possible, for example, if the landlord does not receive the utility bills on time or if service charges have to be adjusted retroactively, for example due to a late property tax assessment notice. As the landlord has no influence on the delay in such cases, he/she is generally not charged for it.
However, the landlord is obliged to make an active effort to obtain the missing data. As soon as the "obstacle" has been removed, he/she must send the service charge statement to the tenant immediately - usually within three months - and fulfill his/her billing obligation. This was the result of a BGH ruling from 05.07.2006, VIII ZR 220/05.
The change to Ralph is uncomplicated.
What happens if the service charge settlement is delayed due to late settlement of the house charges?
It can happen that the property management company sends the WEG statement to the owner or landlord too late. In a ruling, the Federal Court of Justice clarified that a late WEG statement does not, however, exempt a landlord/landlady from preparing the service charge statement for their tenants on time.
Even a contractual, handwritten agreement that the service charge settlement should only be made after settlement by the homeowners' association does not change this obligation (BGH, judgment of 25.01.2017, VII ZR 249/15).
The judgment simply explained
The case: A landlord only handed over the service charge statements for 2010 and 2011 to his tenant in December 2013. The reason he gave for the late service charge statement was that the WEG statement had only just been approved due to a change of manager.
The ruling: However, the BGH ruled that this was not a sufficient excuse. By law, landlords are obliged to submit the statement of operating costs within one year of the end of the twelfth month. This deadline also applies to landlords of condominiums, regardless of when the WEG statement was issued.
The consequences: In this case, the landlord should have submitted the statements for 2010 by the end of 2011 and for 2011 by the end of 2012. As this did not happen, he could no longer claim the service charges for these periods from the tenant.
The reasoning: The BGH emphasized that tenants have a right to timely settlement of operating costs in order to obtain planning security. The delayed WEG statement does not release landlords from their duty to protect the interests of tenants.
The exception: Landlords have the option of demanding additional operating costs from tenants even after the billing period has expired, provided they are not responsible for the late service charge statement (section 556 (3) sentence 3 BGB). An example of this is when the previous WEG property management company, which was dismissed at the end of 2012, did not prepare a proper statement for the years 2010 and 2011.
The Federal Court of Justice has ruled that landlords of condominiums must submit the statement of operating costs to their tenants within the statutory one-year period, regardless of whether the owners' meeting has already decided on the annual statement (BGH, judgment of 25.1.2017, VIII ZR 249/15).
In this case, the new property management company did not submit the owner's statement until November 2013, whereupon the landlord immediately sent the statement of operating costs to the tenant. However, the BGH rejected the landlord's claim for back payment due to the late statement.
Service charges must be settled promptly
Landlords are obliged to bill their tenants for service charges promptly. The law does not stipulate that landlords must first wait for the decision of the community of owners.
Such a waiting obligation would contradict the purpose of timely billing and legal certainty for tenants. Even in the case of condominiums, it is the responsibility of landlords to settle the operating costs promptly in order to provide tenants with quick clarity about the costs incurred.
The Federal Court of Justice has clarified that the property management company is generally not considered to be a vicarious agent of the landlord when preparing the service charge statement.
In the present case, the BGH objected to the fact that the landlord could have already recognized in the course of 2010 that the property management would not submit the required statement of charges on time or would prepare an incorrect statement.
Summary of service charges too late - the consequences
- Loss of additional claims: A late service charge statement can mean that the landlord/landlady can no longer assert additional claims against the tenant. It is therefore important that the statement is delivered on time.
- Obligation to bill: Even if the landlord is late, he/she is still obliged to prepare a proper service charge statement. Amounts paid in excess must be refunded to the tenant.
- Exceptions: In exceptional cases, the landlord may make additional claims even after the deadline has expired if he/she is not responsible for the delay (e.g. due to late delivery of third-party billing data).
- Responsibility for third parties: If the landlord commissions third parties to prepare the service charge statement, he/she must ensure that it is prepared on time. In the event of delays, compensation for lost additional claims may be demanded under certain circumstances.
- Special case of condominium management: In the case of management by the condominium owners' association, a distinction must be made between the late statement of service charges and the statement of service charges. The landlord/landlady remains obliged to settle service charges on time. A delay by the condominium management only relieves the landlord/landlady if the condominium management is not responsible for the delay.
Do you already know Ralph?
Ralph is your modern, digital property management company from Berlin. We are well versed in tenancy law and ensure that your rights and obligations as an owner are always upheld. Get a free, no-obligation quote today. We look forward to getting to know you!
