Service costs settlement: procedure
When renting a home or office space, service costs are often charged for maintenance, management, and other common expenses. The service costs settlement procedure regulates how these costs are determined, allocated, and settled between landlord and tenant. This procedure is legally established and ensures clarity on who pays what. In this article, you will read step by step how the settlement works, what rights and obligations you have, and what you can do in case of doubt or dispute.What are service costs?
Service costs are costs related to the maintenance, management, and use of the common areas of a building, such as an apartment complex, office building, or shopping center. Think of costs for:- Cleaning and maintenance of common areas (e.g., stairwells, gardens, parking lots).
- Insurance (fire, earthquake, contents insurance for common areas).
- Energy (lighting, heating of common areas).
- Water, sewage, and waste removal.
- Elevator maintenance and repairs.
- Management and administration (e.g., salary of the manager).
- Green maintenance and garden management.
- Cleaning of common areas.
Legal basis
The settlement of service costs is regulated in:- Housing Tenancy Act (Wet Huur 2015): Articles 7:290 et seq. regulate the settlement of service costs.
- Civil Code (BW), Book 7: Chapter 10: Addresses the rights and obligations of tenant and landlord regarding common costs.
- General Tenancy Conditions (AVH): Many landlords use these conditions, which often provide more details on how service costs are settled.
Service costs settlement: step by step
The settlement of service costs follows a fixed pattern. Here is an overview of the steps involved:-
1. Advance payment in the rent
Throughout the year, you pay a fixed amount for service costs advance payment monthly together with your rent. This amount is an estimate of the actual costs that will arise. -
2. Cost registration by the landlord
The landlord or manager keeps track of all costs falling under service costs throughout the year. This includes invoices from suppliers (e.g., cleaning companies, elevator technicians, insurance companies) and other cost items. -
3. Preparation of the settlement
At the end of the year (usually within 3 months after the end of the calendar year), the landlord prepares a service costs settlement. This contains:- An overview of all actual costs incurred.
- A comparison with the prepaid amounts.
- A calculation of the difference (overpaid or underpaid).
- An allocation of the costs among the various tenants (e.g., per m² or per unit).
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4. Refund or additional payment
After receipt of the settlement, the difference between the prepaid amounts and the actual costs is settled:- If you have overpaid, you will receive the difference back.
- If you have underpaid, you must pay the difference.