The Service Charge Statementa Guide for Landlords

The Deadline: Twelve Months

The tenant must receive the statement no later than twelve months after the end of the billing period (§ 556(3) of the German Civil Code, BGB). For the 2026 calendar year, that means by 31 December 2027. If it arrives later, the landlord can no longer demand an additional payment – but must still pay out any credit. Exception: the landlord is not responsible for the delay.

What May Be Passed On

Only the types of cost listed in the Operating Costs Ordinance (Betriebskostenverordnung) can be passed on – and only if the tenancy agreement provides for this. They include, among others:

• property tax (Grundsteuer)
• water, sewage, rainwater
• heating and hot water
• lift
• street cleaning and waste collection
• building cleaning and pest control
• garden maintenance
• communal electricity (stairwell, cellar, outdoor lighting)
• chimney sweep
• property and liability insurance
• caretaker
• cable connection (only until mid-2024; no longer recoverable since then)
• other operating costs if they are specifically named in the tenancy agreement (e.g. maintenance of smoke detectors)

What May Not Be Passed On

• administration costs (property management, account fees)
• maintenance and repairs
• maintenance reserve
• vacancy costs
• legal and advisory costs

For flats, the owners' association service charge statement (Hausgeldabrechnung) contains both recoverable and non-recoverable items; landlords must separate them.

Allocation Keys

Unless otherwise agreed, operating costs are allocated according to living area. Costs recorded by consumption (water with meters) are billed according to consumption. For waste or the lift, keys based on the number of persons or units are also common if they have been agreed.

Heating costs: Under the Heating Costs Ordinance, 50 to 70% of heating and hot water costs must be allocated according to consumption, and the rest according to floor area. In certain buildings with poor insulation, 70% is mandatory. If heating costs are not billed according to consumption, the tenant may reduce their share by 15%. Since 2022, landlords with remotely readable meters must also provide monthly consumption information.

Structure of a Correct Statement

Every statement must include:

1. the billing period (no more than twelve months)
2. total costs for each type of cost
3. the allocation key and an explanation of it
4. the tenant's share for each type of cost
5. deduction of the advance payments made
6. the additional payment due or the credit

Example: Statement for a Flat in Bayreuth

A building with six flats and a total living area of 450 m². The tenant occupies 75 m² (16.67% of the area) and has made advance payments of €2,160.

With an additional payment of this size, it makes sense to increase the monthly advance payment by around €35.

CO₂ Costs: Shared Since 2023

Since 2023, landlords have borne part of the CO₂ costs paid with the fuel for heating and hot water. The split follows a tiered model based on the building's CO₂ emissions per square metre: the poorer the building, the higher the landlord's share – up to 95% for very inefficient houses, 0% for very efficient buildings.

The details of the fuel quantity and the CO₂ price are on the supplier's invoice. Landlords must show the split in the statement; if it is missing, the tenant may reduce their share of the heating costs by 3%. For owners of older houses, this is an additional argument for renovation – see Energy-efficient renovation and Heating law (GEG).

A Let Flat: from the Owners' Association Statement to the Tenant Statement

Anyone who lets a flat receives a service charge statement (Hausgeldabrechnung) from the owners' association (WEG) manager. This is not the operating cost statement for the tenant. This is how to proceed:

1. Filter out the recoverable items from the owners' association statement (heating, water, waste, cleaning, insurance, communal electricity).
2. Remove administration, the maintenance reserve and repairs.
3. Add the property tax – it is paid directly by the owner and does not appear in the owners' association statement.
4. Check the allocation keys: the tenancy agreement may provide that the owners' association's keys are adopted. Otherwise, living area applies.
5. Deduct the advance payments and send the statement to the tenant – within the twelve-month deadline.

If the owners' association statement arrives late, this does not release you from the deadline. Many landlords therefore bill using provisional figures or ask the manager for an early statement. More on owners' associations in our guide Flats, owners' associations and service charges.

The Principle of Economic Efficiency

Landlords may only pass on costs that are reasonable under proper management. The tenant can object to overpriced caretaker contracts, unnecessary insurance or service providers at significantly inflated prices. For larger contracts, obtain comparative quotes from time to time – this protects against disputes and lowers costs for everyone. The German Tenants' Association's operating cost index (Betriebskostenspiegel) provides a guide.

The Most Common Points of Dispute

A properly kept statement is also a selling point: buyers of let properties ask for the statements of recent years. More under Tenancy law and Finding tenants.

The Landlord's Year

Anyone who keeps a folder – digital or on paper – with all invoices throughout the year can prepare the statement in a few hours. Keep receipts at least until the end of the objection period; longer periods apply for tax purposes.

Property Tax: Bavaria Calculates Differently

Since 2025, the area model has applied in Bavaria. The new property tax may therefore be higher or lower than before – it often rises for large plots with small buildings and falls for densely built plots in good locations. For the service charge statement:

1. Property tax remains recoverable if the tenancy agreement provides for this.
2. It is generally allocated according to living area; for flats, the tax assessment for the individual flat applies.
3. If the property tax has changed significantly, it is worth adjusting the advance payments.

Inform your tenants early if the property tax has risen sharply – this avoids queries when the statement arrives.

Commercial Leases: More Room for Manoeuvre

For commercial premises, the provisions of the Operating Costs Ordinance are not mandatory. A commercial lease can also pass on administration costs, maintenance or centre management – provided they are clearly and transparently agreed. Blanket wording such as "all ancillary costs" is not sufficient. Clear provisions are particularly important for medical centres and business parks, because they affect the income value of the property. More under Valuing commercial property.

Service Charges When Selling a Let Property

If a let flat is sold in the middle of the year, the question arises as to who issues the statement. In principle, the statement is issued by whoever is the landlord at the end of the billing period – usually the buyer, including for the months before the sale. Seller and buyer should therefore set out in the purchase contract how advance payments and costs are to be settled between them, and hand over all receipts. More on selling let properties under Selling a property: the process.

Digital Tools

Many private landlords prepare their statement using a spreadsheet or special landlord software. Such programs calculate the allocation automatically, take vacancies and changes of tenant into account and produce a clear document for each tenant. Anyone who owns several flats saves a lot of time this way and avoids calculation errors.