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The amendments to the Telecommunications Act (TKG) have brought significant changes for landlords, landladies and tenants alike. The end of the service charge privilege marks an important cut-off date in the German tenancy law landscape and brings with it new challenges for all parties 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 service charge privilege.
Service charge privilege community of owners: What does the service charge privilege mean?
For decades, the ancillary cost privilege allowed landlords and homeowners to pass on the costs of cable connection and cable TV to their tenants via the utility bill. This regulation applied in particular to apartment buildings where collective contracts were concluded with cable network operators. The costs for cable TV and the basic TV supply could therefore be passed on to all tenants as ancillary costs, regardless of whether they actually used the services.
The charges were allocated via the annual service charge bill, whereby the fees for cable TV and cable connection were automatically distributed among all apartment owners or tenants. This practice was particularly attractive for landlords, as it strengthened their negotiating power in collective contracts and enabled more favorable conditions for the entire complex.
The abolition of the service charge privilege: legal basis
With the amendments to the Telecommunications Act, the abolition of the service charge privilege came into force on December 1, 2021. This fundamental change to the law ends the decades-long practice whereby cable fees could be automatically billed via the operating costs. The German Tenants' Association had long campaigned for this reform, as the previous system disadvantaged tenants who did not use cable TV services.
The new regulations in the TKG stipulate that costs for television reception and corresponding services may no longer be passed on to all residents on a flat-rate basis. Instead, individual agreements must be made between providers and users. This means a fundamental change in the way telecommunications services are handled in apartment buildings.
Transition period and practical implementation
With the abolition of the service charge privilege, a transitional period was granted for existing contracts until June 30, 2024. This period allowed condominiums, homeowners and landlords to prepare for the new regulations and make the necessary adjustments. During this period, the previous collective agreements could still be maintained without the need for changes to the tenancy agreement or the service charge statement.
At the end of the transitional period, landlords and property managers are obliged to amend their contracts accordingly:
- Termination of existing collective contracts or conversion to new models
- Informing tenants about the changes
- Adjustment of the operating cost statement
- Review and redrafting of rental agreements
Service charge privilege: effects on communities of owners
The changes pose particular challenges for condominiums. The community must decide how to deal with existing contracts and which alternatives to choose for the future. Various options are available:
Multi-user contracts: These still make it possible to conclude collective contracts for the entire building. However, the individual apartment owners or tenants must give their explicit consent and can enter into individual contracts with the provider.
Individual contracts: Each user concludes their own contract with the cable network operator. This allows maximum flexibility, but can lead to higher costs as the community's negotiating power is lost.
Hybrid solutions: Combination of joint infrastructure contracts for the basic technical equipment and individual contracts for the services used.
Financial impact and cost transparency
The abolition of the service charge privilege has a direct financial impact on all parties involved. While tenants who do not use cable TV services will benefit from a reduction in costs, users may have to bear higher costs. The previous cross-subsidization by non-users will no longer apply.
For an average apartment, the apportionable costs were around 15 to 25 euros per month. These amounts now have to be borne by the actual users, which can 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 managers
The abolition of the service charge privilege presents landlords and property managers with new administrative challenges. Operating cost accounting must be adjusted accordingly and communication with tenants requires additional effort.
Important aspects for practice:
- Checking all existing rental agreements for corresponding clauses
- Adjustment of the ancillary cost ordinance and operating cost settlement
- Informing tenants about changes and alternatives
- Renegotiation or termination of existing contracts with cable network operators
- Documentation of all changes for legal certainty
Service charge settlement deadline: these dates are important for landlords
Legal consequences and compliance
Compliance with the new regulations is legally binding for landlords and property owners. Violations of the provisions of the amended TKG can lead to legal consequences. It is therefore important that all parties involved fully understand and implement the new requirements.
Case law in the coming years will show how the new regulations will be interpreted and applied in practice. Property management companies should keep abreast of new developments and adapt their procedures accordingly.
Alternatives and future prospects
The end of the ancillary cost privilege opens up new opportunities for innovative solutions in the telecommunications sector. Internet-based TV services, streaming platforms and alternative providers are gaining in importance. For owners' associations, this offers the opportunity to implement more modern and flexible solutions.
Possible alternatives include:
- Fiber-based solutions for Internet and TV
- Satellite TV as a shared solution
- Hybrid models with different providers
- Smart home solutions with integrated media services
Recommendations for owners
For owners and condominium owners, the changes result in specific action requirements. A proactive approach is crucial in order to successfully manage the transition phase and find optimal solutions in the long term.
Recommended steps:
- Inventory of all existing contracts and agreements
- Assessment of residents' needs and preferences
- Comparison of different providers and solutions
- Convening an owners' meeting to make a decision
- Professional advice from property management or legal experts
The change to Ralph is uncomplicated.
Conclusion: opportunities and challenges of the new regulations
The end of the service charge privilege marks an important turning point in the German housing industry. While the abolition initially brings with it administrative challenges, it also opens up new opportunities for greater transparency and freedom of choice. Owners' associations, landlords and tenants must adapt to the new circumstances and work together to find solutions that are fair to all parties involved.
Successful implementation of the new regulations requires close cooperation between all parties involved and careful planning. With the right preparation and professional support, the challenges can be overcome and the opportunities presented by the new legal situation can be exploited to the full. As a property management company, we are at your side with our expertise and support you in all matters relating to the service charge privilege and its abolition.
Do you already know Ralph?
Many owners are currently asking themselves how to deal with the abolition of the service charge privilege, what alternatives are available for the existing cable connection and what specific steps are now necessary.
Clear communication and forward-looking organization are the key to successfully adapting to the abolition of the service charge privilege. At Ralph, it is precisely this transition phase that is the focus of our daily work - because only those who act early on can guide the community of owners 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 good time, that collective agreements are terminated correctly and that the new regulations are implemented in everyone's interests - fairly, transparently and with foresight.
Or would you like an administration that actively takes care of these issues and provides you with comprehensive support? Then send us a short message - we will get back to you as soon as possible to plan the next step together.
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