Federal Court of Justice, 28/09/2011, Ref.: VIII ZR 294/10
§ Section 556 of the German Civil Code (BGB) regulates the modalities of the operating cost settlement. According to Section 556 (1) sentence 1 BGB, the landlord and tenant can agree that the tenant bears the operating costs. In accordance with Section 556 (3) BGB, the advance payments for operating costs must be settled annually and the principle of economic efficiency must be observed.
The following operating costs may be charged in accordance with the Operating Costs Ordinance.
1. property tax
2. water supply
3. drainage
4th lift
5. street cleaning and waste disposal
6. building cleaning and pest control
7. garden maintenance
8. lighting
9. chimney cleaning
10. property and liability insurance
11. caretaker
12. community antenna system
13. facilities for laundry care / mechanical washing equipment
14. ice and snow removal / winter service
15 Other operating costs
16. new types of operating costs
In particular, the adjustment of advance payments of operating costs is repeatedly the subject of legal disputes.
Pursuant to Section 560 (4) BGB, if advance payments of operating costs have been agreed, either party may adjust the amount to an appropriate level by means of a declaration in text form following a statement of account.
The above-mentioned BGH judgement had to deal with the question of whether the tenant had to accept an increase in operating costs of around 20%.
FactsThe plaintiffs were tenants of a flat owned by the defendant. In March 2009, the defendant invoiced the operating and heating costs for the calendar year 2008.
The operating costs attributable to the flat in the billing period, including heating costs, totalled € 3,670.89.
Taking into account the advance payments made by the plaintiffs, the defendant calculated an additional claim in the amount of € 348.09.
The defendant then declared an increase in the monthly advance payments from € 276.90 to € 336.50, namely € 251.48 for "operating costs" and € 85.02 for "heating/utility costs".
The plaintiffs then sought a court ruling that they were not obliged to make monthly advance payments of more than € 228.62 for cold operating costs and more than € 77.29 for heating costs from May 2009.
The resulting total amount of € 305.91 corresponds to one twelfth of the operating and heating costs incurred by the plaintiffs in 2008.
The defendant, on the other hand, was of the opinion that it was not bound by the last statement of operating costs when adjusting the advances, but could apply a "safety surcharge" of 10 % to the most recently calculated operating costs due to expected price increases, in particular due to massively increased energy costs.
The local court upheld the claim, the regional court dismissed the defendant's appeal.
Federal Court of JusticeThe BGH followed the view of the local and regional courts and dismissed the appeal. The action for a declaratory judgement was well-founded and the plaintiffs were not obliged, contrary to the defendant's request, to make higher advance payments on the operating and heating costs from May 2009 than the amounts conceded by them in the application for a declaratory judgement.
In the case of agreed advance payments for operating costs, either party may adjust the advance payments to an appropriate amount by means of a declaration in text form after a statement of account (Section 560 (4) BGB).
This is intended to take account of changes in operating costs that occur during the course of the tenancy, for example with regard to the number of residents or consumption habits.
With regard to the concept of appropriateness, section 560 (4) BGB corresponds with the provision in section 556 (2) sentence 2 BGB, according to which advance payments for operating costs can only be agreed in an appropriate amount.
In the explanatory memorandum to this provision, reference is made to the predecessor provision in Section 4 (1) MHG.
This means that the advance payments should be based on the amount of the expected operating costs.
Accordingly, the reasonableness of advance payments should be based on the costs actually expected to be incurred.
However, the right of the parties to the tenancy agreement to make an adjustment only exists "after a settlement" in accordance with Section 560 (4) BGB.
The starting point for the adjustment is therefore the last statement of operating costs that is already available; a "last possible" statement that has not yet been drawn up is not decisive.
The adjustment of the advance payments to the most recent statement of operating costs ensures that the advance payments - in the interests of both contracting parties - are as close as possible to the costs actually likely to be incurred.
In the opinion of the BGH, the Court of Appeal rightly deduced from the statutory link to the last statement of operating costs that this statement forms the basis of the adjustment and therefore - at least as a rule - one twelfth of the annual amount owed by the tenant from the last statement of operating costs is appropriate as a monthly advance payment amount for the following year.
This is because the development of operating costs in the previous year justifies a forecast of the expected level of operating costs in the following year if there are no other indications. This is not disputed.
Contrary to the opinion of the Court of Appeal, however, there may also be exceptions to this method of calculation due to special circumstances.
According to the Court of Appeal, the advance payments should only be adjusted by dividing the result of the last statement of operating costs by twelve; no other circumstances should be taken into account. This was not the case.
Neither the tenant nor the landlord are prevented from adjusting the advance payments in view of the fact that the operating costs for the current year are likely to be higher or lower than the operating costs billed for the previous year.
This is because the decisive factor for the appropriateness of an adjustment is ultimately not the operating costs of the previous year but, as explained, the expected costs of the current year.
These could also be significantly influenced by circumstances that may not yet have had an effect on the last operating cost statement.
For example, a drastic change in the number of residents, which is referred to in the legal materials as a reason for adjustment, may not have had an effect in the previous year or only for a short period of time, but may have a full effect in the current year and thus justify an adjustment of the advance payments.
The last statement of operating costs is therefore the starting point and orientation aid for an adjustment of the advance payments, but does not prevent the consideration of other circumstances - which have already occurred or will occur - which are likely to influence the costs incurred in the current year.
If such circumstances would make advance payments in a different amount appear appropriate than would be expected on the basis of the previous year's statement, both the tenant and the landlord could make a corresponding adjustment.
However, there is no room for an "abstract" safety surcharge of 10 % due to possible price increases.
The granting of a general surcharge of 10 % on the total operating costs, which is significantly higher than the current general rate of inflation, would go beyond the landlord's legitimate interest in not having to pre-finance the operating costs to be borne by the tenant.
Only if price increases are specifically expected with regard to certain operating costs - such as energy prices - can this be included in the calculation of the advance payments, but only taking into account the ratio of the relevant operating costs to the total operating costs.
Source: Federal Court of Justice
Important Note: The content of this article has been prepared to the best of our knowledge and belief. However, due to the complexity and constant evolution of the subject matter, we must exclude liability and warranty. Important Notice: The content of this article has been created to the best of our knowledge and understanding. However, due to the complexity and constant changes in the subject matter, we must exclude any liability and warranty.
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