The changes to the Telecommunications Act (TKG) have brought significant changes for owners, landlords, and tenants alike. The end of the ancillary cost exemption marks an important milestone in the German tenancy law landscape and presents new challenges for everyone involved. As a property management company, we would like to provide you with comprehensive information about these changes and explain the most important aspects of the abolition of the ancillary cost exemption.
Additional costs privilege for homeowners' associations: What does the additional costs privilege mean?Link to this section
For decades, the utility costs exemption allowed landlords and property owners to pass on the costs of cable connections and cable TV to their tenants via the utility bill. This regulation applied particularly to apartment buildings where collective contracts were concluded with cable network operators. The costs of cable TV and basic TV service could thus be passed on to all tenants as utility costs, regardless of whether they actually used the services.
The allocation was made via the annual utility bill, with the fees for cable TV and cable connection being automatically distributed among all apartment owners or tenants. This practice was particularly attractive for landlords, as it increased negotiating power in collective contracts and enabled more favorable terms for the entire complex.
The abolition of the ancillary costs privilege: Legal basisLink to this section
With the changes in Telecommunications Act The abolition of the utility costs privilege came into force on December 1, 2021. This fundamental change to the law ends the decades-long practice of automatically billing cable fees through operating costs. The German Tenants' Association had long advocated for this reform, as the previous system disadvantaged tenants who did not use cable TV services.
The new regulations in the Telecommunications Act stipulate that costs for television reception and related services may no longer be passed on to all residents in a lump sum. Instead, individual agreements must be made between providers and users. This represents a fundamental change in the way telecommunications services are handled in multi-family homes.
Transition period and practical implementationLink to this section
With the abolition of the ancillary costs privilege, a transitional period was granted for existing contracts until June 30, 2024. This period allowed condominium associations, property owners, and landlords to prepare for the new regulations and make the necessary adjustments. During this period, the existing collective agreements could still be maintained without any changes to the rental agreement or the ancillary costs bill.
After the end of the transition period, landlords and property managers are obliged to adapt the contracts accordingly:
Termination of existing collective agreements or switching to new modelsInforming tenants about the changesAdjustment of the operating costs statementReview and redesign of rental agreements
Ancillary costs privilege: Impact on homeowners’ associationsLink to this section
For condominium associations, these changes pose particular challenges. The community must decide how to handle existing contracts and what alternatives to choose for the future. Several options are available:
Multi-user contracts:These still allow for collective contracts to be concluded for the entire building. However, individual apartment owners or tenants must explicitly consent to this and can enter into individual contracts with the provider.
Individual contracts:Each user concludes a separate contract with the cable network operator. This allows for maximum flexibility, but can lead to higher costs because the collective bargaining power is eliminated.
Hybrid solutions:Combination of common infrastructure contracts for the basic technical equipment and individual contracts for the services used.
Financial impact and cost transparencyLink to this section
The elimination of the utility bill exemption has direct financial implications for everyone involved. While tenants who don't use cable TV services benefit from a cost reduction, users may have to bear higher costs. The previous cross-subsidization by non-users is eliminated.
For an average apartment, the apportionable costs were approximately €15 to €25 per month. These amounts must now be borne by the actual users, which could lead to a significant increase in individual costs. At the same time, households that rely on streaming services or other alternatives benefit from the exemption from these costs.
New challenges for landlords and property managersLink to this section
The abolition of the utility bill exemption presents landlords and property managers with new administrative challenges. Operating cost statements must be adjusted accordingly, and communication with tenants requires additional effort.
Important aspects for practice:
Review of all existing rental agreements for relevant clausesAdjustment of the ancillary costs regulation and operating cost statementInforming tenants about changes and alternativesRenegotiation or termination of existing contracts with cable network operatorsDocumentation of all changes for legal security
Utility bill deadline: These dates are important for landlords
Legal consequences and complianceLink to this section
Compliance with the new regulations is legally binding for landlords and property owners. Violations of the provisions of the amended Telecommunications Act can lead to legal consequences. Therefore, it is important that all parties fully understand and implement the new requirements.
Case law in the coming years will determine how the new regulations will be interpreted and applied in practice. Property management companies should continually inform themselves about new developments and adapt their procedures accordingly.
Alternatives and future prospectsLink to this section
The end of the service charge exemption opens up new opportunities for innovative solutions in the telecommunications sector. Internet-based TV services, streaming platforms, and alternative providers are gaining importance. This offers homeowners' associations the opportunity to implement more modern and flexible solutions.
Possible alternatives include:
Fiber-based solutions for Internet and TVSatellite TV as a community solutionHybrid models with different providersSmart home solutions with integrated media services
Recommendations for action for ownersLink to this section
The changes create concrete needs for owners and condominium associations. A proactive approach is crucial to successfully managing the transition phase and finding optimal long-term solutions.
Recommended steps:
Inventory of all existing contracts and agreementsAssessment of residents’ needs and preferencesComparison of different providers and solution approachesConvening a Owners' meeting for decision-makingProfessional advice from property management or legal experts
Conclusion: Opportunities and challenges of the new regulationsLink to this section
The end of the ancillary costs privilege marks an important turning point in the German housing industry. While its abolition initially presents administrative challenges, it also opens up new opportunities for greater transparency and freedom of choice. Owner associations, landlords, and tenants must adapt to the new circumstances and work together to find solutions that are fair to all parties involved.
The successful implementation of the new regulations requires close cooperation between all parties involved and careful planning. With proper preparation and professional support, the challenges can be overcome and the opportunities presented by the new legal situation can be optimally utilized. As a property management company, we are at your side with our expertise and support you with all questions relating to the ancillary charge privilege and its abolition.
Do you already know Ralph?
Many property owners are currently asking themselves how to deal with the loss of the utility bill exemption, what alternatives are available to the existing cable connection, and what concrete steps are now necessary.
Clear communication and forward-looking organization are key to successfully adapting to the abolition of the service charge privilege. At Ralph, this transitional phase is the focus of our daily work – because only those who act early can guide the homeowners' association through the changes efficiently and in compliance with the law.
As an experienced property management company, we ensure that all parties involved are informed in a timely manner, that collective contracts are terminated correctly, and that the new regulations are implemented in the interests of everyone – fairly, transparently, and proactively.
Or would you prefer an administration that actively addresses these issues and provides you with comprehensive support? Then please send us a short message – we'll get back to you promptly to plan the next steps together.
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