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Letting Yield & Cash Flow

The German service charge statement: the twelve-month deadline and what it costs

Last updated: 25 August 2026 · Reading time approx. 8 minutes

The Betriebskostenabrechnung – the annual service charge statement a German landlord owes a tenant – is the one item in a tenancy where money is lost purely because a date has passed. Not because the costs were wrong, not because they were too high, but because the statement reached the tenant too late. § 556 (3) BGB settles this in four sober sentences, and those four sentences decide whether an entire year’s balancing payment is still enforceable.

This article deals exclusively with the law of Germany. Austria and Switzerland govern the recharging of operating costs under their own statutes, which are not covered here.

The four deadlines in § 556 (3) BGB

The subsection is short enough to read in the original. In order, it provides: “The advance payments for operating costs are to be accounted for annually; the principle of economic efficiency is to be observed. The statement is to be communicated to the tenant at the latest by the end of the twelfth month after the end of the accounting period. Once that period has expired, the landlord is barred from asserting a back-claim unless the landlord is not responsible for the delay.”

WhatDeadlineConsequence if missed
Prepare the statementAnnually, covering the advance payments madeThe landlord owes no interim statements.
Communicate the statementBy the end of the twelfth month after the end of the accounting periodThe landlord’s back-claim is barred.
Exception–The bar does not apply where the landlord is not responsible for the late assertion.
Tenant’s objectionsBy the end of the twelfth month after receipt of the statementAfter that the tenant can no longer raise them – subject to the same “not responsible” exception.

Two details are routinely overlooked. First, the statute speaks of communicating, not of posting: what counts is that the statement reaches the tenant. Where the accounting period is the calendar year, that means 31 December of the following year. Second, nothing can be changed by contract – under § 556 (5) BGB any agreement deviating from subsection 3 to the tenant’s disadvantage is void.

What may be recharged at all

Only costs that are both agreed and operating costs in the legal sense may be recharged. § 556 (1) BGB permits the agreement and refers, for the schedule of costs, to the Betriebskostenverordnung (BetrKV, the operating costs ordinance). Its § 2 BetrKV lists the catalogue in seventeen numbered items – from the recurring public charges on the land (notably the property tax you can pass on to the tenant) through water, drainage, heating, the lift, street cleaning, gardening, lighting, chimney sweeping and property and liability insurance, to item 17, “other operating costs”. That residual item covers only costs that meet the definition and do not appear in items 1 to 16 – and it must be named specifically in the tenancy agreement to work.

Only the amount actually incurred may be recharged. If, after a year with vacancies, you are granted property tax relief for rent loss, the statement has to show the lower figure.

The counter-check sits in § 1 (2) BetrKV. Under it, operating costs expressly do not include administration costs – including the value of management work performed by the landlord personally – nor maintenance and repair costs, meaning everything spent to remedy defects caused by wear, ageing and weathering. Which items are therefore left with the owner for good is set out in non-recoverable operating costs.

The allocation key

Unless the parties have agreed otherwise, § 556a (1) BGB allocates operating costs by share of living space. Costs that depend on a metered consumption, by contrast, must be allocated by a key that reflects the differing consumption. For let condominium units there is a special rule in § 556a (3) BGB: absent a deviating agreement, the key applicable between the co-owners governs – so the owners’ association statement feeds straight through into the tenancy statement.

For heat and hot water the Heizkostenverordnung (HeizkostenV, the heating costs ordinance) applies alongside. Under § 7 (1) HeizkostenV, of the costs of operating the central heating system at least 50% and at most 70% must be allocated by metered heat consumption – the German text says “vom Hundert”, the older wording for per cent; the remainder goes by living or usable floor space or by enclosed volume.

The most expensive detail in the whole statement: where costs are not allocated by consumption contrary to the heating costs ordinance, the user may reduce their share by 15% under § 12 (1) HeizkostenV. Where no remotely readable metering equipment has been installed, or the prescribed billing information is not provided in full, the reduction is 3%. Both bite regardless of whether the deadline was met.

A worked example

A let condominium unit of 80 square metres in a building with 400 square metres of total living space; the accounting period is the calendar year. The floor-space share is therefore 20%. Heating costs are allocated 70% by consumption.

ItemCost for the buildingTenant’s share
Property tax2,400 euros480 euros
Water and drainage3,200 euros640 euros
Cleaning and gardening1,800 euros360 euros
Property and liability insurance1,200 euros240 euros
Communal electricity600 euros120 euros
Heating and hot water12,000 euros2,220 euros
Total recoverable21,200 euros4,060 euros
Advance payments (12 × 320 euros)–− 3,840 euros
Balancing payment–220 euros

The heating line in detail: of 12,000 euros, 70% – 8,400 euros – is allocated by consumption, and the meters attribute 1,500 euros of that to this unit. The remaining 3,600 euros run through floor space, of which 20% is 720 euros. Together 2,220 euros. The other five items add up to 9,200 euros, of which 20% is 1,840 euros; with heating that gives the 4,060 euros in the table.

More interesting than the 220 euros balancing payment is the second calculation, the one that appears in no statement at all: the same unit carries 960 euros of management fees and 600 euros of repairs from the owners’ association budget. Those 1,560 euros are non-recoverable under § 1 (2) BetrKV and reduce the owner’s cash flow year after year – considerably more than the balancing payment brings in. Where that figure belongs in the return calculation is shown in calculating the cash flow of a rental property.

When the deadline has been missed

The wording is precise: what is barred is “the assertion of a back-claim by the landlord”. The duty to account itself does not lapse, and a credit balance in the tenant’s favour is not improved by the passage of time. Account late and you lose the balancing payment while still owing the refund.

The “not responsible” exception is narrow and must be substantiated by the landlord. It aims at circumstances outside their sphere of influence; a heavy workload, a change of managing agent or a late owners’ association statement are no free pass. In practice: if the consumption data are still missing in the fourth quarter, document the process rather than banking on the exception.

The preclusion period must be kept apart from limitation. A back-claim billed in time is subject to the standard limitation period of three years under § 195 BGB, which begins under § 199 (1) BGB at the end of the year in which the claim arose and the creditor learned of the circumstances giving rise to it. The twelve-month period therefore decides whether the claim can be asserted, limitation for how long.

Documents, advance payments and the Anlage V

Under § 556 (4) BGB the landlord must, on request, grant the tenant inspection of the supporting documents underlying the statement – and is expressly entitled to provide those documents electronically. A properly kept digital document file per property therefore serves two purposes at once: the inspection right and the basis of the tax return.

Where the advance payments no longer fit, § 560 (4) BGB allows either party, after a statement, to adjust them to an appropriate level by declaration in text form. The moment for that is now – right after the statement, not at the next payment shock.

For tax purposes the recharges received are income and the costs paid are deductible expenses, each in the calendar year in which they were received or paid (§ 11 EStG). A balancing payment for 2025 that arrives in 2026 therefore belongs in the Anlage V rental income schedule for 2026. How the individual lines are filled in is set out in filling in the Anlage V: the landlord’s guide.

What the courts have decided

The statute says what must be communicated in time – but not when a letter counts as a “statement” under § 556 (3) BGB in the first place. The Federal Court of Justice (Bundesgerichtshof, BGH) fills that gap.

BGH, default judgment of 8 December 2010 – VIII ZR 27/10

A service charge statement is formally valid only with four minimum items: a summary of the total costs, the allocation key – stated and, where necessary for understanding, explained – the calculation of the tenant’s share, and the deduction of the advance payments made. Missing any one of them makes the statement invalid, and the tenant’s twelve-month objection period never even starts to run. For the landlord that means: an incomplete statement is not a provisional one – it is legally no statement at all. Skipping any of the four minimum items forfeits exactly the legal certainty the deadline is meant to provide.

BGH, judgment of 24 August 2016 – VIII ZR 261/15

Formal validity of a heating-cost statement does not depend on whether the underlying consumption figures were metered or – say, after a meter failure – estimated under § 9a HeizkostenV, nor on whether that estimate is substantively accurate. No explanation of the estimation method or supporting documents are required for formal validity. For the landlord this considerably eases meeting the deadline when a meter is broken – but it does not replace substantive accuracy, which a tenant can still challenge by objection.

Frequently asked questions

Do I have to account if a flat rate was agreed?

No. § 556 (2) BGB permits the agreement as a flat rate or as an advance payment; the duty to account in subsection 3 exists only “for the advance payments”. With a flat rate there is no annual statement – in return, increases may only be passed on under § 560 (1) BGB, and only if the tenancy agreement so provides. The same distinction decides money elsewhere: for the rental deposit, § 551 (1) BGB expressly leaves flat rates and advance payments out, so the cap is measured on the net rent alone.

Does the posting date count, or receipt?

Receipt. The statute requires that the statement has been communicated to the tenant. The burden of proof lies with the landlord, so a verifiable method of delivery is advisable when the calendar is tight.

Can the deadline be extended in the tenancy agreement?

No. § 556 (5) BGB declares void any agreement deviating from subsections 1, 2 sentence 2, 3 or 3a to the tenant’s disadvantage. A clause granting the landlord more time has no effect.

Can the cost of a fibre-optic connection be recharged?

Only in a limited way. Under § 556 (3a) BGB the tenant bears a fibre-optic provision charge only where the measure is implemented economically; in the case of an elaborate measure within the meaning of the Telecommunications Act, only if the landlord obtained three quotes as far as possible before the agreement and selected the most economical one.

Documents, deadlines and recharges per property in one place

RenoDiary keeps invoices, service charges and maintenance dates together per property, separates recoverable from non-recoverable costs and prepares the Anlage V from them.

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Sources

This article offers general orientation and does not replace individual tax or legal advice within the meaning of § 3 StBerG. What governs is the wording of the law as applicable at the time, the circumstances of the individual case and advice from a qualified professional.