As a landlord, you are required to prepare a utility bill for your tenants once a year. To ensure this complies with legal requirements, several factors must be considered. If your condominium association is managed by Ralph and you have signed up for the special property management (SEV) agreement with us, we will prepare the utility bill for you promptly and in compliance with the law as part of the service package.
Creating a utility bill: What are utility costs?Link to this section
The annual utility bill includes all ongoing costs that arise in addition to the rent for an apartment or house and that can be passed on to the tenant. One-off costs are generally not considered utility costs.
Do your own utility bill: Which utility costs should be included in the utility bill?Link to this section
You don't want to use special property management (SEV), but want to prepare your utility bill yourself? No problem. The utility bill will be based on the Operating Costs Ordinance This stipulates that the following expenses belong in the utility bill:
Building insuranceproperty taxGarden careCleaning costs for gutters and light shaftsCosts for street cleaning and garbage collectionIndoor and outdoor lightingWastewater feeCosts for heating and hot waterCosts for elevatorsStaircase cleaningCaretaker costsCosts for communal antenna systems or cable televisionCosts for shared washroomsMaintenance costs for smoke extraction systems, smoke detectors, fire extinguishers, lightning rods
Important: Include the additional costs agreement in the rental agreement
The payment of additional costs must be explicitly agreed upon in the rental agreement. However, the costs involved do not need to be listed in detail. If the rental agreement does not contain an explicit agreement regarding additional costs, the rent is considered inclusive, which covers all additional costs.
These costs are not included in the utility billLink to this section
When you prepare a utility bill, there are certain costs that cannot be allocated. These include:
Maintenance and repair costsReal estate transfer taxIncome tax on rental incomeLegal protection insuranceHome contents insuranceProperty management costs or other administrative costs
By when do you have to prepare the utility bill at the latest?Link to this section
The utility bill must be prepared and presented to the tenants within one year of the end of the billing period.
Example: For the year 2025, you must prepare the utility bill and submit it to your tenants by December 31, 2026 at the latest.
Adhering to this deadline is important, as tenants who fail to comply with it are exempt from paying utility costs. The same deadline applies to the utility bill after tenants move out.
Send the utility bill to the employment agency
In cases where tenants pay rent through the employment agency, the utility bill must be submitted directly to the agency. However, the job center often bills utility costs as a flat-rate rent without requiring a utility bill. Which of these two options is appropriate depends on the individual case.
Have utility bills prepared, but correctlyLink to this section
Unfortunately, errors often occur when preparing utility bills – especially when they're created by a property management company that still relies heavily on manual work and has error-prone internal processes. In contrast, a professionally prepared utility bill from a modern property management company like Ralph is not only clear and understandable, but also provides noticeable relief for you as a landlord.
Are you looking for a new property management company? Contact us for a free quote.
Common mistakes inUtility billsLink to this section
Utility bills cause uncertainty for both tenants and landlords. Often, the items are unclear or unclear, raising the question: Are all the items truly justified? In fact, these and other errors in utility bills are not uncommon.
We have summarized 8 common mistakes for you.
1) Deadline for the operating costs statement is not met
As already mentioned, according to Section 566 Paragraph 3 of the German Civil Code (BGB), you must deliver the utility bill no later than 12 months after the end of the billing period. If this deadline is exceeded, tenants can generally refuse to pay any additional charges. Exceptions and special features, as well as additional payments, also frequently lead to errors in utility bills:
1a) Error sources, exceptions and special features
Late access:If the utility bill arrives late to the tenants, it may still be valid under certain circumstances. However, as a landlord, you would need to be able to prove that the delay was not your fault.Termination of the tenancy:Even if your tenants have already moved out, the 12-month deadline for utility bills remains in place.No billing:If you do not issue an invoice at all, the tenant has the right to retain their advance payments on the operating costs.
1b) Source of error: back payments
If, after the utility bill has been settled, it turns out that the tenant still has to make an additional payment, a three-year limitation period applies to this claim as well. This period begins at the end of the year in which the claim arose.
2) Inaccurate description of additional cost items
When you, as a landlord, prepare a utility bill, a clear and detailed list of cost items is essential to avoid errors. It is crucial that the tenant can clearly identify the costs based on the names and any explanations. If this is not possible, the obligation to pay for these items is waived, and they must be removed from the utility bill.
Example: Vague phrases like "maintenance of technical equipment" are not apportionable. They do not precisely define the equipment involved in either the rental agreement or the operating costs statement and therefore do not fulfill the requirement of transparency for tenants.
In principle, every item must be specified in the rental agreement. If the agreement only contains the general term "operating costs," at least the costs listed in the current operating costs regulations are apportionable. If a specific list of costs is included in the rental agreement, this is considered complete and binding. Only the additional costs explicitly stated therein can be billed to the tenant.
3) FalseBilling period
A common mistake in utility bills is an improperly defined billing period. This period must be exactly twelve months, although the exact start and end dates can be set flexibly—they don't necessarily have to follow the calendar year. However, if costs are billed that occurred outside of this period, the utility bill is invalid.
In certain situations, the billing period can be shortened without the tenant's consent. This is the case, for example, if a new building is only completed and ready for occupancy during the current year.
4) Deviation from the rental agreement
An equally common mistake in utility bills is a deviation from the rental agreement. The rental agreement specifies whether and how utility costs are to be paid by tenants, whether as a lump sum or in advance. Only the utility costs specified in the contract may be billed.
Some contracts list the reimbursable costs in detail, while others refer to the Operating Cost Ordinance (BetrKV). This defines 17 types of costs that you may pass on to tenants, from property taxes and caretaker fees to garden maintenance. Costs outside this list are not reimbursable.
5) One-off costs are charged
When preparing utility bills, it's important to differentiate between recurring operating costs and one-time expenses. Only regularly incurred expenses associated with the ongoing use of the building may be passed on to tenants. One-time costs, however, are excluded from the allocation. These include, for example:
Pest control measuresMaintenance and repair costsProperty management costsInsurance premiums for loss of rent or legal protectionExpenses for postage or banking services
You may not charge your tenants for these items.
6) Incorrect billing of additional costs when the property is vacant
Errors also frequently occur when billing utility costs for vacant properties. It's important to note that ongoing operating costs for vacant properties are generally the responsibility of the landlord and must be taken into account when billing utility costs.
To ensure a fair distribution of costs, vacant apartments are assessed as if they were still normally occupied. This procedure prevents the remaining tenants from being unfairly burdened by the vacant apartments.
With area-based cost allocation, the total area remains unchanged, meaning vacant apartments are still included. If the allocation is based on the number of people, a fictitious person for each unoccupied unit is included in the total calculation.
This procedure ensures that the costs of vacancy are borne by you as the landlord and are not passed on to the remaining tenants.
7) Incorrect distribution key
The allocation key is one of the most common sources of error in utility bills. Although the living space often serves as the basis for cost allocation, even this seemingly simple method contains numerous pitfalls.
The calculation of living space can vary depending on the underlying regulations. For example, the specifications of the Living Space Ordinance differ from those of DIN 277 with regard to the treatment of specific residential areas. Therefore, precise consideration of elements such as window recesses, sloping roofs, balconies, and conservatories is important for accurate area calculation.
8) Additional sources of error in the billing of heating costs
In your heating bill, you may also pass on additional expenses to your tenants in addition to fuel costs. These include electricity costs for operating the heating system, system maintenance, chimney sweep fees (including sweeping and emission measurement costs), and consumption recording costs.
Repair costs for the heating system, on the other hand, are not apportionable and may not appear in the bill. In our experience, however, landlords often mistakenly declare these expenses as maintenance costs or operational electricity costs.
Punctual and legally compliant: Have your utility bill prepared by RalphLink to this section
Do you still handle the preparation of utility bills yourself? By engaging Ralph's special property management service, this task is taken care of for you. As a digital property management company, we understand the precise requirements you face as a landlord and offer comprehensive services to ease your burden.
Conclusion: Have utility bills prepared: You will avoid these mistakesLink to this section
As a landlord, you are obligated to prepare a correct utility bill. However, billing utility costs often presents a challenge. It goes like this: The complexity of the utility bill leads to errors or missed deadlines – and a conflict between landlord and tenant is inevitable.
However, if you have your utility bill prepared by a professional property management company like Ralph, you won't make the following mistakes:
Deadline missedIncorrect billing periodAdditional costs agreement not included in the rental agreementIncorrect billing in the event of vacancyNon-recoverable costs such as one-off costs are billedOverlooking a cost itemMandatory information not provided
Ralph supports landlords in preparing utility billsLink to this section
At Ralph, we rely on modern service and streamlined processes to simplify the preparation of utility bills. Thanks to the use of modern technologies and efficient processes, we are able to significantly simplify the preparation of utility bills.
This leads to higher customer satisfaction and enables us to offer our services cost-effectively as a digital property management company. Ralph is setting new standards in the property management industry and demonstrating what a modern and effective utility bill accounting system can look like.
Bill additional costs correctly:This is how we do it
We use a digital billing program that allows for the automatic capture and linking of all relevant data. This saves us time and minimizes the risk of errors. You can also view and review your bills online at any time.
Discover now on our information page Property management costs Find out how your homeowners association can benefit from Ralph and request your free quote here. We're happy to answer any questions you may have.
