Annual Service-Charge Statement (Hausgeldabrechnung): Reading and Checking the WEG Account Correctly

What is the service charge – and what is the service-charge statement?

The service charge (Hausgeld) refers to the regular, usually monthly advance payments that every condominium owner makes to the association. Legally, these are the advances resolved under § 28 (1) WEG to cover costs and to fund the reserves. The service charge therefore covers the running costs of the common property as well as the build-up of the maintenance reserve (Erhaltungsrücklage).

The service-charge statement (Hausgeldabrechnung) – also called the annual statement – is the retrospective account for a completed financial year. It sets the association's actual income and expenditure against the advances previously resolved and allocates the costs to the individual units according to the applicable distribution key. An important distinction:

• The economic plan (Wirtschaftsplan) is the forecast for the coming year (§ 28 (1) WEG) – it determines the ongoing service charge.
• The annual statement (Jahresabrechnung) is the review of the past year (§ 28 (2) WEG) – it shows whether a back-payment is due or a credit exists.

The party liable for the service charge is, in principle, the condominium owner entered in the land register. The payment obligation attaches to ownership, not to use of the apartment.

The components of the service-charge statement at a glance

A complete service-charge statement is typically divided into an overall account for the entire association and an individual account for the respective apartment. The following items regularly appear:

• Operating costs of the common property: heating and hot water, water and sewage, communal electricity, refuse collection, building cleaning, garden maintenance, winter service, lift, chimney sweep and building and liability insurance.
• Administration costs: the property manager's fee, account-keeping costs, tax advice where applicable, and organising the owners' meeting.
• Maintenance and repairs: ongoing, smaller upkeep measures on the common property, insofar as they are not financed from the reserve.
• Contribution to the maintenance reserve (Erhaltungsrücklage): the saved share for larger future refurbishments, shown as a separate item.

Each item is allocated to the units via a distribution key (Verteilerschlüssel) – often by co-ownership shares (Miteigentumsanteile, MEA), for consumption-based costs such as heating and water partly by consumption, and in some associations by floor area or per unit. Which key applies follows from the law, the declaration of division (Teilungserklärung) or a resolution.

Recoverable and non-recoverable costs towards tenants

If an owner rents out their apartment, a key question is: which items of the service-charge statement may be passed on to the tenant as operating costs? Only those costs are recoverable that are operating costs within the meaning of the Operating Costs Ordinance (BetrKV) and have been validly agreed in the tenancy agreement – usually via a reference to § 2 BetrKV. The service-charge statement and the operating-costs statement are therefore not identical.

Typically recoverable (under § 2 BetrKV) are, among others:

• property tax, water and drainage, heating and hot water
• refuse disposal and street cleaning, lift, chimney cleaning
• building cleaning, garden maintenance, lighting of communal areas
• property and liability insurance of the building, caretaker (operating-cost share only)

Not recoverable are in particular:

• the property manager's fee and other administration costs
• the contribution to the maintenance reserve (Erhaltungsrücklage)
• maintenance and repair costs on the common property
• the WEG's bank and account-keeping charges

Mixed items such as caretaker or lift require particular care, as recoverable operating costs and non-recoverable maintenance or administration shares are combined. Here only the pure operating-cost share is recoverable.

Maintenance reserve and asset report after the 2020 WEG reform

The 2020 WEG reform changed the terminology. What was formerly the "Instandhaltungsrücklage" is now called the maintenance reserve (Erhaltungsrücklage) in the law. Under § 19 (2) no. 4 WEG, "the accumulation of an appropriate maintenance reserve" is part of proper administration. It finances larger upkeep and refurbishment measures, for instance to the roof, façade, heating system or lift.

Important: the maintenance reserve belongs to the association as community assets. On the sale of an apartment it is not paid out to the selling owner and does not pass to the buyer as an individual credit – the proportionate balance remains within the WEG's assets.

Also new under the reform: the asset report (Vermögensbericht) under § 28 (4) WEG. The manager must prepare it after the end of a calendar year. It states the level of the reserves and a list of the essential community assets – in practice the bank balance, the state of the maintenance reserve and any special reserves. The asset report must be made available to every owner; it is an information instrument and is not itself a matter for resolution.

Accounting balance and resolution at the owners' meeting

A central – and often misunderstood – point of the reform concerns the resolution at the owners' meeting. Under § 28 (2) WEG, owners no longer resolve on the annual statement as a complete set of figures, but only on demanding additional payments or adjusting the resolved advances. This difference is the so-called accounting balance (Abrechnungsspitze).

The accounting balance is the difference between the costs actually attributable to a unit and the advances resolved for that unit. If there is a shortfall, an additional payment is demanded; in the case of a surplus, the future advances are usually adjusted. Whether an owner has actually paid their advances is irrelevant to calculating the accounting balance – outstanding advances remain separately owed.

This leads to an important clarification: the remaining figures of the statement – the list of all income and expenditure, the allocation and the explanations – serve control and transparency, but are not themselves a separate matter for resolution. Even before the reform, the Federal Court of Justice (BGH) had limited the binding effect of the resolution to the accounting result; the reform has anchored this line in law.

Checking the service-charge statement step by step

Every owner should review their statement not only as to the final result, but systematically. The following points deserve particular attention:

1. Cash flow and account balances: do the opening balance, posted income and expenditure and the closing balance of the accounts add up arithmetically? A plausible cash-flow calculation is the foundation of a correct statement.
2. Distribution key: were the costs allocated by the correct key – for example co-ownership shares, floor area, units or consumption?
3. Maintenance reserve: does the stated balance match the asset report, and was the contribution made as resolved?
4. Separation of cost types: are recoverable and non-recoverable costs cleanly separated? This is particularly relevant for owners who let their apartment.
5. Inspection of documents: conspicuous or sharply increased items can be checked against invoices, contracts and bank statements. Owners have a right to inspect the underlying documents.

Anyone who is unsure can involve the advisory board (Verwaltungsbeirat), which reviews the statement before the meeting, or, in case of legal doubts, consult their own lawyer or a tenants'/owners' association.

Deadlines, errors and objections – and why this matters when buying

§ 28 WEG does not contain a rigid statutory deadline for preparing the annual statement. According to case law and administrative practice, however, the statement is expected within a reasonable period after the end of the financial year; three to six months are often cited. If the statement is considerably delayed, owners can press for it to be prepared.

If an owner considers the resolution on additional payments or the adjustment of advances to be flawed, they can challenge it with an action for annulment (Anfechtungsklage). Under § 45 WEG, the action must be brought within one month of the resolution being passed and substantiated within two months. Both periods are exclusion periods – anyone who misses them can, as a rule, no longer challenge the resolution, even if it were flawed in substance. In case of doubt, prompt action and, where appropriate, legal advice are therefore important.

Precisely when buying a condominium in Düsseldorf or NRW, service-charge statements, economic plans, the asset report and the minutes of the last owners' meetings are revealing: they show the level and development of the maintenance reserve, refurbishments already resolved and possible special levies. A plausible statement and a healthy reserve speak for a soundly managed association – and noticeably affect the value and saleability of an apartment.