What happens if the utility bill is issued late? Delivering utility bills to tenants on time is an important part of your responsibilities as a landlord. If landlords take too long, they may be left with the costs. What consequences does a late utility bill have for you and your tenants? And what legal rulings are there on this topic?
In this article, we'll address this in detail. We'll explain the potential consequences of a delayed utility bill and, based on case law, illustrate the rights and obligations you and your tenants have in such situations.
How are additional costs billed?Link to this section
Additional costs, commonly referred to as operating costs, include all costs incurred by the landlord through the ownership and management of an apartment. These include, for example, property taxes, electricity costs, water consumption costs, and garbage collection fees.
The rental agreement can specify how the tenant is to cover these costs. Common options include a flat-rate utility fee, where the tenant pays a fixed monthly amount, or an advance payment, which covers the costs monthly in advance. With a flat-rate utility fee, no bill is issued. In the case of an advance payment, the landlord is obligated to prepare and submit an annual utility bill.
The bill shows the tenant's consumption during the billing period and the landlord's actual costs. If the tenant has a credit, they are entitled to a refund. If the costs exceed the advance payments, the landlord is entitled to additional payments.
What is the deadline for the utility bill settlement?Link to this section
The following deadlines apply to utility bills: For advance payments, the tenant is entitled to a timely and proper bill. The billing period is one calendar year. Depending on the agreement, the billing period can also begin with the tenant moving into the apartment.
The statement must be delivered 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.
A detailed explanation of the deadlines can be found in our article on Utility bill settlement deadlines.
These are the consequences of late billingLink to this section
If the utility bill is prepared on time, the landlord can claim additional payments if the advance payments already made by the tenant do not cover the actual operating costs. However, if the landlord misses the statutory deadline, they lose this right.
This means that the tenant is not required to make any additional payments if the utility bill is delayed. However, the landlord is still obligated to issue a utility bill. If the tenant has paid too much in advance, the excess amount must be refunded to them.
Landlord is responsible for late billingLink to this section
In principle, the landlord is obligated to obtain all necessary documents for the preparation of the utility bill in a timely manner. If they commission third parties, they must ensure that they process the documents on time.
It's not enough to simply wait until the required documents arrive. In such cases, the burden of proof lies with the landlord. They must be able to prove that any delay was not their fault.
Relief is possible, for example, if the landlord fails to receive utility bills on time or if utility costs must be adjusted retroactively, for example, due to a late property tax assessment. Since the landlord has no control over the delay in such cases, they are generally not held accountable for it.
However, the landlord is obligated to actively seek the missing data. Once the "obstacle" has been removed, they must immediately send the utility bill to the tenant – usually within three months – and fulfill their billing obligation. This was determined by a Federal Court of Justice ruling of July 5, 2006, case number VIII ZR 220/05.
What happens if the utility bill is delayed due to a late payment of the maintenance fee?Link to this section
It's certainly possible that the property management company sends the condominium association statement to the owner or landlord late. In a ruling, the Federal Court of Justice clarified that a late condominium association statement does not, however, exempt a landlord from the obligation to submit the utility bill to their tenants on time.
Even a contractual, handwritten agreement that the utility bill should only be issued after the homeowners' association has settled the bill does not change this obligation (Federal Court of Justice, judgment of January 25, 2017, VII ZR 249/15).
The verdict simply explained
The case:A landlord had not handed over the utility bills for 2010 and 2011 to his tenant until December 2013. He stated that the reason for the delayed utility bill was that the condominium association bill had only recently been approved due to a change of property manager.
The verdict:However, the Federal Court of Justice ruled that this is not a sufficient excuse. Landlords are legally obligated to submit the utility bill within one year of the end of the twelfth month. This deadline also applies to landlords of condominiums, regardless of when the condominium association bill was issued.
The consequences:In this case, the landlord should have submitted the bills for 2010 through the end of 2011 and for 2011 through the end of 2012. Since this did not happen, he could no longer demand payment of the utility costs for these periods from the tenant.
The reason:The Federal Court of Justice emphasized that tenants are entitled to prompt billing of operating costs in order to ensure planning security. Delayed billing by the condominium association does not release landlords from their duty to protect the interests of tenants.
The exceptionLandlords have the right to demand additional utility costs from tenants even after the billing deadline has expired, provided they are not responsible for the delayed utility bill (Section 556, Paragraph 3, Sentence 3 of the German Civil Code). An example of this is if the previous condominium property management company, which was dismissed at the end of 2012, failed to prepare proper billing for 2010 and 2011.
The Federal Court of Justice has ruled that landlords of condominiums must submit the operating cost statement 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 January 2017, VIII ZR 249/15).
In this case, the new property management company had not submitted the owner's statement until November 2013, whereupon the landlord immediately sent the utility bill to the tenant. However, the Federal Court of Justice rejected the landlord's claim for additional payment due to the late billing.
Additional costs must be settled promptly
Landlords are obligated to promptly bill their tenants for utility costs. The law does not require landlords to first wait for the homeowners' association's decision.
Such a waiting period would contradict the purpose of timely billing and the legal certainty of tenants. Even in condominiums, landlords are responsible for promptly billing operating costs in order to quickly provide tenants with clarity about the costs incurred.
The Federal Court of Justice has clarified that the property management is generally not considered an agent of the landlord when preparing the utility bill.
In the present case, the Federal Court of Justice objected that the landlord could have already recognized in the course of 2010 that the property management had not provided the necessary Housekeeping bill not submit it on time or create an incorrect invoice.
Summary Additional costs too late - the consequencesLink to this section
Loss of additional claims:A delayed utility bill can result in the landlord no longer being able to claim additional payments from the tenant. Therefore, timely delivery of the bill is important.Obligation to settle accounts:Even in the event of a delay, the landlord remains obligated to prepare a proper utility bill. Any overpaid amounts must be refunded to the tenant.Exceptions:In exceptional cases, the landlord may also make additional demands 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 of third parties:If the landlord commissions a third party to prepare the utility bill, they must ensure that it is prepared on time. In the event of delays, compensation for lost additional payments may be claimed.Special case of condominium management:If the property is managed by the condominium association, a late service charge statement must be distinguished from the utility bill statement. The landlord remains obligated to submit the utility bill on time. A delay by the condominium association management only relieves the landlord of liability if the condominium association 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 a landlord are always protected. Get your service today. a free and non-binding offer We look forward to meeting you!
