Are additional costs automatically passed on to tenants?Link to this section
Apportionable additional costs cannot be automatically passed on to tenants. It must be clearly stated in the rental agreement beforehand whether the additional costs are included in the rent or not.
However, you don't have to break down every single factor; it's sufficient to state in the rental agreement that operating costs are not included in the rent. It doesn't matter whether these are actually operating costs or not. Legally, this refers to all additional costs that can be passed on to the tenants.
If you, as a landlord, would like to know exactly which additional costs can be passed on in your rental property, take a look at the Operating Costs Ordinance (BetrKV). This ordinance defines what operating costs are and which types of costs you can specifically pass on to tenants. Section 1 contains a general definition, while Section 2 provides a detailed list of the additional costs that can be passed on. The following sections provide further explanation and provide you with an overview of the additional costs that can be passed on and what they mean.
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What are operating costs?Link to this section
The German Civil Code (BGB) and the Ordinance on Operating Costs (BetrKV) precisely regulate which expenses related to home ownership can be borne by tenants, provided this is stipulated in the rental agreement. This also precisely defines operating costs in the sense of apportionable additional costs. The term "operating costs" encompasses various items. Specifically, these are expenses that regularly arise from the use of buildings, land, and facilities. Below you will find an overview of apportionable additional costs.
Which additional costs can be passed on to tenants?Link to this section
Which expenses related to your property can be passed on to your tenants is prescribed by law. These include the following items:
1. Property tax
Since property tax is one of the ongoing costs of a property that arise regularly, it can be passed on to tenants according to the Operating Costs Ordinance. The amount of property tax is set by the respective municipality and can therefore vary regionally.
2. Insurance costs
The apportionable additional costs that landlords do not have to bear themselves include, for example, homeowner's liability insurance, oil tank insurance, elevator insurance, and glass and building insurance.
3. Costs for garbage collection and street cleaning
Waste disposal fees and street cleaning expenses, including winter maintenance costs, are apportionable operating costs. However, the purchase costs for waste containers must be borne by the owners. These costs cannot be apportioned.
4. Warm operating costs - heating
Heating costs are also included in the apportionable additional costs. All costs related to heating (and hot water) can be passed on to tenants as "heating operating costs." These are billed based on consumption. Heating costs include both fuel consumption and the costs for maintenance and operation of the heating system. However, the law stipulates that at least 50% of these total costs, but no more than 70%, can be charged to tenants.
5. Warm operating costs - hot water
The operating costs for hot water supply include both the costs for the central hot water system (e.g., maintenance, inspection) and the costs for providing hot water (e.g., delivery, cleaning of appliances). These costs can be passed on to the tenants.
6. Lighting costs
The costs incurred by lighting the common areas around the property can be passed on to the tenant. However, this only applies to the electricity costs incurred as a result, not to new lamps or lightbulbs. These are considered maintenance costs and are therefore the responsibility of the landlord.
7. Wastewater fee
Wastewater is considered running costs and can therefore be passed on to the tenant. Both the fees for using the public sewer system (sewer and drain fees) and the operating costs for any on-site drainage pump are allocable operating costs that you, as the landlord, can pass on to the tenants.
8. Costs of building cleaning
If the stairwells and other common areas of the property are cleaned by a cleaning company, these costs can be passed on to the tenant.
9. Caretaker costs
If there is a caretaker for the entire property, some of the costs can be passed on to the tenant. This is partly because a distinction is made here between activities performed for the operation of the property and those purely repair costs, which must be borne by the landlord. This category also includes all costs directly related to the caretaker's employment, such as salary, social security contributions, and other non-cash benefits.
Example:Although there is a caretaker for the property, he or she only takes care of repairs such as changing lightbulbs or replacing broken window panes. These are repairs that must be borne by the apartment owners.
10. Garden maintenance costs
The apportionable additional costs also include the maintenance of gardens, playgrounds, and access roads. If there is a garden surrounding the property, the costs for its maintenance, such as mowing the lawn or trimming bushes, can be passed on to the tenant. This also includes the planting of new trees, bushes, and flowers.
11. Cable connection, TV antenna, satellite dish
According to the Operating Costs Ordinance, all "audiovisual reception facilities" can be passed on to tenants. This item includes both the ongoing operating costs of the facilities (electricity) and their maintenance costs. In addition, there are the monthly basic fees for broadband connections.
12. Costs for the washroom
The costs for operating the communal laundry room can also be charged to the tenants. If the rental property has a laundry room, the associated costs, such as electricity consumption and maintenance work, may be passed on to the tenants.
13. Costs for the chimney sweep
Operating costs also include the chimney sweep's fees – even if there is no fireplace in the apartment.
14. Elevator costs
The operating costs of an elevator can also be passed on to the tenants. In particular, the costs for electricity consumption and regular elevator maintenance are apportionable. These costs are passed on to all tenants, including those living on the ground floor who may use the elevator less frequently.
15. Other operating costs
Other operating costs include all costs incurred pursuant to Section 1 of the Operating Costs Ordinance and not listed under the previously mentioned items. A typical example of this is gutter cleaning.
What are non-recoverable additional costs?Link to this section
Not all utility costs are apportionable. In addition to apportionable utility costs, there are costs that are borne exclusively by the landlord. These include, in particular, maintenance and repair costs. Administrative costs such as tax advice or insurance are also the responsibility of the landlord. Likewise, interest on property financing, taxes, and irregular maintenance work, such as tree felling, are not borne by the tenant.
Empty apartment? What to do if it's vacant?Link to this section
If an apartment isn't rented out, the costs still continue to accrue. Vacant properties can therefore be quite costly for landlords. However, there's a concession: When a property is vacant, landlords can claim the additional costs as business expenses, thus reducing their tax burden.
Apportionable additional costs must be stated in the rental agreementLink to this section
While the Operating Costs Ordinance provides a framework, the rental agreement ultimately determines which costs you, as the landlord, may pass on to your tenants. An explicit agreement in the rental agreement is mandatory. Even if new types of costs arise after the contract is signed, they can generally be passed on, provided no restrictions are specified in the contract.
An example: If operating costs are generally mentioned in the rental agreement, any costs for garden maintenance that may arise later may also be passed on to the tenant.
Distribution key regulates distribution among tenantsLink to this section
There are various options for allocating operating costs. Generally, billing is based either on a distribution key or on the living space. An individual distribution key is particularly useful when there are a few tenants with different consumption levels, ensuring fair distribution. For example, garbage collection costs can be allocated according to the number of residents. Heating and hot water costs are billed according to consumption, as required by law.
