Allocability

In tenancy law, apportiability refers to the characteristic of certain operating costs that the landlord is not required to bear personally but may pass on to the tenants. The Operating Costs Ordinance (BetrKV) definitively governs which costs are apportiable. These costs may only be passed on if the lease agreement expressly provides for their apportionment and the costs are listed in the BetrKV. Incorrect operating cost statements are one of the most common points of dispute in tenancy law-and an error that can be avoided with care and the right knowledge.

Which operating costs are apportionable?

The Operating Costs Ordinance provides an exhaustive list of all apportionable cost types in § 2 BetrKV. These include:

1. Recurring public charges: Property tax
2. Water supply and drainage: Water charges, basic fees, costs for water meters, sewage charges
3. Heating costs: Fuel, operation, maintenance of the heating system, flue gas testing, chimney sweeping
4. Hot water costs: Energy for hot water production, water supply for hot water
5. Elevator operation: Electricity, maintenance, TÜV inspections
6. Street cleaning and garbage collection: Public fees
7. Building cleaning and pest control: Stairwells, common areas
8. Landscaping: Maintenance of outdoor facilities, green spaces, playgrounds
9. Lighting: Common areas (stairwell lighting, outdoor lighting)
10. Chimney sweeping: Unless included in heating costs
11. Property and liability insurance: Building, liability, and glass insurance
12. Caretaker: Costs for caretaker services that do not constitute management or maintenance
13. Community antenna / cable connection: Recurring costs, not connection fees
14. Other operating costs: Gutter cleaning, smoke detector testing, Legionella testing, smoke alarm maintenance, lift system

The following are expressly not apportionable: administrative costs, maintenance and repair costs, vacancy costs (costs for unrented apartments are borne solely by the landlord), as well as costs that constitute investments by their nature.

Formal Requirements for the Operating Cost Statement

The operating cost statement must be prepared annually and sent to the tenant no later than 12 months after the end of the billing period (Section 556(3) of the German Civil Code (BGB)). If this deadline is missed, the statement is invalid - any additional claims against the tenant are waived. For their part, tenants may demand additional payment or a refund up to 12 months after receiving the statement.

A formally correct statement must include:

• Total costs per cost category (with receipt number or receipt)
• Allocation formula used and its justification
• Tenant’s share (calculated and presented in a transparent manner)
• Advance payments made by the tenant
• Balance (additional payment or refund)

Tenants have the right to inspect supporting documents - landlords must provide the underlying invoices upon request. Copies may be requested at the tenant’s expense. The retention period for supporting documents is at least 5 years after the end of the billing period; we recommend 6 years in accordance with the tax retention period.

Common Errors in Operating Cost Statements

The most common errors we see in practice that render individual items invalid:

• Incorrect allocation formula: The lease agreement specified living space, but billing was based on the number of occupants - or vice versa.
• Maintenance costs listed as operating costs: Repairs to common facilities are not apportionable-even if they occur regularly.
• Hidden administrative costs: Property management or accounting costs appear as “other operating costs”-which is not permitted.
• Lack of account separation during vacancy: The landlord’s vacancy costs are allocated to all tenants-the landlord must bear the vacancy portion themselves.
• Late billing: After the 12-month period expires, the landlord completely loses the right to claim additional payments.

Allocation of Modernization Costs: Distinction from Operating Cost Allocation

The modernization surcharge under Section 559 of the German Civil Code (BGB) must be distinguished from the operating cost allocation: The landlord may add 8% of the modernization costs attributable to an apartment to the rent annually - this is not an operating cost allocation, but a permanent rent increase. For rents below €7/m², a cap of €2/m² applies over a period of 6 years.

Important: Maintenance and repair measures cannot be billed via the modernization surcharge. The distinction between maintenance (preserving the current condition) and modernization (improving the current condition) is often disputed and should be reviewed by a lawyer in case of doubt.

Practical Tip for Property Owners in Nuremberg and Franconia

In Nuremberg, errors in operating cost statements are a frequent point of contention between landlords and tenants-especially in older apartment buildings with many changes of ownership, where lease agreements from different decades coexist with varying wording regarding operating costs.

We recommend that landlords:

• Have the statement prepared by a professional (property management company, tax advisor, or tenancy lawyer)-the costs are well worth the investment.
• Clearly define the allocation formula in the lease agreement and standardize it for new leases.
• Explicitly list new types of operating costs (e.g., Legionella testing, smoke detector inspection) as other operating costs in the lease agreement before billing them.

Tenants can have incorrect bills reviewed by the Mieterverein Nürnberg und Umgebung e. V.-membership is relatively affordable and the advice is expert.

Frequently Asked Questions

What happens if the landlord bills for costs that are not apportionable?

Tenants can object to these items and withhold or reclaim the corresponding amounts. However, an incorrect bill does not invalidate the entire bill-only the ineligible items are excluded. The tenant must file the objection within 12 months of receiving the statement; after that, their claim for reimbursement is time-barred.

Are administrative costs apportionable?

No. Costs for property management, bookkeeping, and commercial administration are expressly not apportionable and may not appear in the operating cost statement. The landlord bears these costs themselves-they are part of the business risk associated with the rental activity. The same applies to costs for managing vacant units and to bank fees incurred in connection with rent payments.

Can the landlord bill heating costs on a flat-rate basis?

No. The Heating Cost Ordinance (HeizkostenV) stipulates that at least 50% (up to a maximum of 70%) of heating costs must be billed based on consumption-using calibrated heat meters or heat cost allocators. A purely area-based allocation is not permitted; in the event of a violation, tenants have the right to reduce the total heating bill by 15% (Section 12 HeizkostenV). Buildings supplied exclusively with district heating are also covered by the HeizkostenV. New buildings are generally already equipped with appropriate metering systems; in older buildings, retrofitting with heat cost allocators is often still necessary.

Who bears the operating costs for vacant units?

The landlord bears the operating costs attributable to vacant units themselves-these costs may not be allocated to the remaining tenants. This means: When using living space as the allocation basis, the landlord must calculate out their own share of the vacant units and bear it themselves before the remaining costs are distributed among the actual tenants. A common mistake is to simply divide the total costs by the total living space-in which case the tenants indirectly bear the cost of the vacant units.

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