Operating costs

Operating costs are defined in section 556(1) sentence 2 of the Bürgerliches Gesetzbuch (BGB – German Civil Code) as follows:

“Operating costs are the costs incurred by the owner or the holder of the heritable building right as a result of ownership or the heritable building right to land or as a result of the intended use of the building, the outbuildings, facilities, installations and the land on an ongoing basis.”

The operating costs are usually paid by the owner and allocated to tenants in the utility bill. A distinction must be made between residential and commercial leases.1
For residential leases, in accordance with section 556(1) BGB, only the operating costs listed in the German Operating Costs Ordinance can be allocated to the tenants. This is an exhaustive list of which costs can be transferred to the tenant under an allocation agreement.2 These include, among others, the cost of water supply, drainage, garden maintenance, lighting, chimney cleaning or the caretaker (see German Operating Costs Ordinance of 25 November 2003).3
The allocation of other operating costs can also be agreed in commercial leases. For this reason, the term “operating costs” is often expanded on in this context and replaced by the term “additional costs”.4 In practice this usually includes the payment of maintenance or administrative costs. The scope of the costs that can be allocated according to printed form must be defined precisely.5 In order not to violate the transparency requirement in accordance with section 307(1) sentence 2 BGB, the individual costs should be stipulated in form agreements. If the costs incurred are not clear to the tenant when the agreement is concluded, this represents an incalculable risk to the tenant, which is an unreasonable disadvantage and therefore void. In property industry practice, a catalogue of additional costs to be paid in addition to the operating costs in accordance with the German Operating Costs Ordinance is therefore usually enclosed.6

If the tenant uses only part of the property, the operating costs must be allocated proportionately. The allocation formula for these costs must be contractually agreed. They are normally allocated based on the share of space or, for consumption-based costs (e.g. heating, water) according to individual consumption taking space into account. In the event of vacancies these pro rata costs must be paid by the landlord.7
Monthly advances on operating costs are usually agreed. After the end of the business year the landlord must issue a bill for the operating costs actually incurred and possibly reimburse any excess advances paid. This must be issued within twelve months of the end of the business year (section 556(3) BGB), otherwise the claim to subsequent payment expires for residential leases. Residential tenants must raise any objections within twelve months of receipt of the bill (section 556(3) BGB). This does not apply to commercial leases.8

The operating costs are a component of the management costs that, in addition to these, include non-allocable management costs. In accordance with section 19 of the Immobilienwertermittlungsverordnung (ImmoWertV – German Property Valuation Ordinance), these comprise administrative costs, maintenance costs and the risk of lost rent.9
  • 1 Vgl. Schlosser, Daniela (2009). Mietrecht. In: Balensiefen, Gotthold; Bönker, Christian; Geiger, Norbert; Schaller, Wolfgang: Rechtshandbuch für die Immobilienpraxis. Erwerb, Entwicklung, Bestandshaltung, Vermarktung, München, S. 653.
  • 2 Vgl. Schlosser, Daniela (2009). Mietrecht. In: Balensiefen, Gotthold; Bönker, Christian; Geiger, Norbert; Schaller, Wolfgang: Rechtshandbuch für die Immobilienpraxis. Erwerb, Entwicklung, Bestandshaltung, Vermarktung, München, S. 653.
  • 3 Vgl. Kleiber (2014): Verkehrswertermittlung von Grundstücken. Kommentar und Handbuch zur Ermittlung von Marktwerten (Verkehrswerten) und Beleihungswerten sowie zur steuerlichen Bewertung unter Berücksichtigung der ImmoWertV, 7. Aufl. Köln, S. 1687-1833.
  • 4 Vgl. Kleiber (2014): Verkehrswertermittlung von Grundstücken. Kommentar und Handbuch zur Ermittlung von Marktwerten (Verkehrswerten) und Beleihungswerten sowie zur steuerlichen Bewertung unter Berücksichtigung der ImmoWertV, 7. Aufl. Köln, S. 1687-1833.
  • 5 Vgl. Schmidt, Joachim (2014): Recht der Immobilienverwaltung. In: Schulte, Karl-Werner; Kühling, Jürgen; Servatius, Wolfgang; Stellmann, Frank: Immobilienökonomie II. Rechtliche Grundlagen, 3. Aufl. München, S. 541.
  • 6 Vgl. Schlosser, Daniela (2009). Mietrecht. In: Balensiefen, Gotthold; Bönker, Christian; Geiger, Norbert; Schaller, Wolfgang: Rechtshandbuch für die Immobilienpraxis. Erwerb, Entwicklung, Bestandshaltung, Vermarktung, München, S. 653.
  • 7 Vgl. Bönker, Christian; Lailach, Martin (2009): Praxisleitfaden Immobilienrecht. Erwerb Finanzierung Bebauung und Nutzung, 2. Aufl. München, S. 223.
  • 8 Vgl. Bönker, Christian; Lailach, Martin (2009): Praxisleitfaden Immobilienrecht. Erwerb Finanzierung Bebauung und Nutzung, 2. Aufl. München, S. 223.
  • 9 Vgl. Bundesrepublik Deutschland, vertreten durch das Bundesministerium der Justiz und für Verbraucherschutz (Herausgeber) (2015): Verordnung über die Grundsätze
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Swiss Life Asset Managers
http://www.corpus-sireo.com/en/glossary/operating-costs
: 20.10.2019