Non-recoverable service charges: what stays with the landlord

In almost every purchase calculation the Hausgeld – the monthly building charge on a German condominium – appears as a single figure. That is the most expensive simplification in the whole model: part of it you recover from the tenant, part of it stays with you permanently, and it is that second part which eats the return. This article shows which items German law expressly excludes from apportionment, why no tenancy agreement brings them back, and how to get the amount into your calculation cleanly.

The starting point: apportionment is the exception, not the rule

Without an agreement the landlord bears everything. § 556 (1) sentence 1 BGB puts it as an option: “Die Vertragsparteien können vereinbaren, dass der Mieter Betriebskosten trägt” – the parties may agree that the tenant bears operating costs. If the tenancy agreement is silent, all running costs are covered by the base rent. For the schedule of those operating costs, § 556 (1) sentence 3 BGB keeps the Betriebskostenverordnung (BetrKV, the Operating Costs Ordinance) in force – it is therefore the governing catalogue.

Under § 1 (1) BetrKV, operating costs are the costs that accrue to the owner “through ownership … of the land or through the intended use of the building … on an ongoing basis”. The word ongoing is the filter: a one-off repair does not accrue on an ongoing basis, a refuse collection charge does.

The two express exclusions in § 1 (2) BetrKV

The ordinance does not leave the boundary to interpretation. It names two groups that expressly do not count as operating costs:

1. Management costs – under § 1 (2) no. 1 BetrKV, “the costs of the staff and facilities required to manage the building, the costs of supervision, the value of management work performed personally by the landlord, the costs of statutory or voluntary audits of the annual accounts and the costs of running the business”. The managing agent's fee falls under this – and so does your own working time, which you can therefore never pass on.
2. Maintenance and repair costs – under § 1 (2) no. 2 BetrKV, the costs that must be incurred during the useful life “to maintain the intended use, in order to remedy properly the structural or other defects arising from wear, ageing and weathering”.

The second exclusion is no accident but the flip side of a principal duty: under § 535 (1) sentence 2 BGB the landlord must keep the property “in this condition during the tenancy”. Maintenance is his contractual performance; he can hardly invoice the tenant for it.

The dividing line on the concrete item

§ 2 BetrKV lists the apportionable operating costs in 17 numbered items – the public charges at the very top, which is why the property tax can be passed on to the tenant. The table below draws the line at the positions that cause arguments in practice.

The caretaker is the item on which most statements come apart. § 2 no. 14 BetrKV expressly permits the remuneration but, in the same sentence, excludes everything concerning “Instandhaltung, Instandsetzung, Erneuerung, Schönheitsreparaturen oder die Hausverwaltung” – maintenance, repair, renewal, decorative repairs or building management. Passing on the caretaker's invoice undivided passes on precisely the share the ordinance excludes.

Why item 17 is not a general clause

§ 2 no. 17 BetrKV names “sonstige Betriebskosten” – other operating costs – and defines them as “operating costs within the meaning of § 1 that are not covered by numbers 1 to 16”. The reference back to § 1 is decisive: what is not operating cost at all under § 1 (2) BetrKV does not become one via item 17. Management and maintenance therefore stay outside, no matter how the line is captioned in the annual statement.

The tenancy agreement does not help here either. § 556 (5) BGB is explicit: “Eine zum Nachteil des Mieters von Absatz 1, Absatz 2 Satz 2, Absatz 3 oder Absatz 3a abweichende Vereinbarung ist unwirksam” – an agreement deviating from those paragraphs to the tenant's detriment is void. A clause declaring management costs apportionable deviates from paragraph 1 to the tenant's detriment.

What it means in cash flow

Take a typical let condominium: 78 m², base rent 620 € per month, monthly building charge of 285 € per the annual budget.

That 100 € a month is 1,200 € a year – against an annual base rent of 7,440 € it is 16.1 % of rental income before interest, principal and tax even begin. In a calculation that knows only “building charge 285 €”, this effect appears either not at all or overstated threefold. How the figure belongs in the running calculation is shown in our article on calculating a property's cash flow.

Deadline and basis: two rules that cost money

Advance payments must be accounted for annually under § 556 (3) sentence 1 BGB, observing the principle of economy. Sentence 2 sets the deadline: the statement must reach the tenant “no later than the end of the twelfth month after the end of the accounting period”. After that, an additional claim is barred – unless the landlord is not responsible for the delay. Conversely, under sentence 5 the tenant also has twelve months from receipt to raise objections. How these deadlines interlock and what remains enforceable once they have passed is set out in the service charge statement and its twelve-month deadline.

The basis of apportionment sits in § 556a BGB. Absent an agreement to the contrary, costs are apportioned by share of living space (paragraph 1 sentence 1); costs recorded as consumption-dependent go by a basis reflecting the differing consumption (sentence 2). For let condominiums a special rule applies that investors frequently miss: under § 556a (3) BGB, absent another agreement, costs are apportioned “by the basis applicable in each case for allocation among the condominium owners” – that is, by the key in the declaration of division, not by living space.

For heating and hot water the Heating Costs Ordinance is added: § 7 (1) sentence 1 HeizkostenV requires that at least 50% and at most 70% of the costs of operating the central heating system be allocated by recorded heat consumption. The remainder goes by living or usable floor area or by enclosed volume.

If the advance payment no longer fits, § 560 (4) BGB allows either party, after a statement has been issued, to make “an adjustment to an appropriate amount” in text form. Anyone who omits this for years is bridge-financing their tenant's operating costs.

Both sides show up for tax – but not symmetrically

For the Anlage V return the distinction is not the end of the story. The apportionment paid by the tenant accrues to you and is therefore income within the meaning of § 8 (1) sentence 1 EStG; the underlying outgoings are income-related expenses under § 9 (1) sentence 1 EStG – “Aufwendungen zur Erwerbung, Sicherung und Erhaltung der Einnahmen”, expenditure to acquire, secure and maintain income. Both amounts belong in the return and largely cancel out.

What remains is precisely the non-recoverable part – and it works in full. § 9 (1) sentence 3 no. 2 EStG expressly names “Steuern vom Grundbesitz, sonstige öffentliche Abgaben und Versicherungsbeiträge” – taxes on real property, other public charges and insurance premiums – in so far as such expenditure relates to buildings or items serving the taxpayer in generating income. Where the individual amounts land in the return is shown in our guide to Anlage V.

What the courts have decided

One dispute runs through almost every caretaker line item: who separates the share of an in-house employee’s working time that is recoverable from the share that stays with the landlord as administration or maintenance? The Federal Court of Justice (Bundesgerichtshof, BGH) has confirmed a workable way out.

Frequently asked questions

Can I pass on management costs with a clause in the tenancy agreement?

Not for residential lettings. Management costs are not operating costs under § 1 (2) no. 1 BetrKV, and § 556 (5) BGB declares an agreement deviating from paragraph 1 to the tenant's detriment void. These protective provisions do not apply in the same way to commercial leases – that is a topic of its own.

Are servicing costs the same as repair costs?

No, and the ordinance separates them cleanly. Regular servicing is expressly named as operating cost in several places, for example the cleaning and servicing of floor-level heating units in § 2 no. 4 letter d BetrKV. Remedying a defect, by contrast, falls under the exclusion in § 1 (2) no. 2 BetrKV. Invoices bundling both into one line have to be split.

What happens if I miss the accounting deadline?

Under § 556 (3) sentence 3 BGB an additional claim is barred once the deadline has passed, if you are responsible for the delay. A credit due to the tenant is unaffected – the deadline operates one-sidedly against you.

Sources

• § 535 BGB (principal duties, landlord's duty to maintain) — Gesetze im Internet (retrieved on 7 August 2026)
• § 556 BGB (agreements on operating costs, accounting deadline) — Gesetze im Internet (retrieved on 7 August 2026)
• § 556a BGB (basis of apportionment for operating costs) — Gesetze im Internet (retrieved on 7 August 2026)
• § 560 BGB (changes in operating costs, adjusting advance payments) — Gesetze im Internet (retrieved on 7 August 2026)
• § 1 BetrKV (definition of operating costs and the two exclusions) — Gesetze im Internet (retrieved on 7 August 2026)
• § 2 BetrKV (schedule of operating costs, items 1 to 17) — Gesetze im Internet (retrieved on 7 August 2026)
• § 7 HeizkostenV (allocation of heating costs) — Gesetze im Internet (retrieved on 7 August 2026)
• § 8 EStG (income) — Gesetze im Internet (retrieved on 7 August 2026)
• § 9 EStG (income-related expenses) — Gesetze im Internet (retrieved on 7 August 2026)
• BGH, judgment of 14.11.2012 – VIII ZR 41/12 (billing caretaker and gardening services at a third party's fictitious cost) — Federal Court of Justice (retrieved on 25 August 2026)

This article provides 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.