German commercial service charges explained

The lease decides – not the law

Under German law the landlord bears the costs of the property unless the lease shifts them to the tenant (§ 535 BGB). The detailed rules for residential tenancies (§§ 556 ff. BGB) only apply to commercial leases where § 578 BGB says so. In practice this means: a commercial tenant pays exactly the operating costs that the lease clearly assigns to them.

A reference to the statutory catalogue of operating costs (§ 2 BetrKV) is valid. If a lease simply speaks of "Betriebskosten", the Federal Court of Justice reads this as the costs listed in that catalogue (BGH, 8 April 2020, XII ZR 120/18). Costs outside the catalogue – such as centre management or marketing – need their own, transparent clause.

Typical positions and their limits

• Management costs may be passed on in commercial leases by standard clause, but only to the extent customary and necessary – and not twice under centre management or property management.
• Maintenance of common areas (malls, car parks, technical systems) cannot be shifted to the tenant by standard clause without a cap on the amount (BGH, 6 April 2005, XII ZR 158/01).
• Vacancy is the landlord's risk: costs of empty units may not be spread over the remaining tenants.
• Insurance may be passed on if agreed, but premiums must be economical.
• CO2 costs for heating: in buildings not mainly used for housing, the landlord bears at least half (§ 8 CO2KostAufG).
• Property tax (Grundsteuer) was reassessed for all properties from 1 January 2025; new assessment notices and municipal rates often change the amount.

Deadlines are different from residential leases

Landlords usually have to settle within twelve months after the end of the billing period. Unlike in residential leases, missing this deadline does not cancel back-charges in a commercial lease (BGH, 27 January 2010, XII ZR 22/07). In turn, there is no statutory deadline for the tenant's objections – unless the lease sets one (BGH, 28 May 2014, XII ZR 6/13).

Claims – the landlord's back-charges as well as your refunds – are generally time-barred three years after the end of the year in which the statement was received (§§ 195, 199 BGB). Paying a statement without reservation does not mean you accepted it.

Inspection of invoices

As a tenant you may inspect the invoices behind the statement (§ 259 BGB). Inspection usually takes place at the landlord's or property manager's office; many provide scans. Ask for inspection in writing before you pay a large back-charge.

VAT on service charges

If the landlord has opted for VAT on the rent (§ 9 UStG), the service charges are subject to VAT as well – including property tax and insurance (BGH, 30 September 2020, XII ZR 6/20). The landlord must calculate on net costs where they can deduct input VAT. Tenants such as banks and medical practices usually cannot be charged VAT at all, because the landlord cannot opt for them.

Checklist for your German statements

• Does the statement show total costs, allocation key, your share and advance payments?
• Is every position agreed in the lease – and is the clause transparent and, where needed, capped?
• Does the allocation use the correct lettable area, including vacant units?
• Is centre management or administration charged twice?
• Has the landlord deducted their share of the CO2 costs?
• Is VAT calculated correctly – or not at all, if your business does not allow the option?
• Is a refund for earlier years still possible before it becomes time-barred?

More detail (in German)

Our German guides go deeper into each topic: what may be charged, deadlines, centre management, CO2 costs and VAT. This guide is general information and not legal advice.