Notary Fees,
Sales Tax and other important "legal" information how to buy/sell in
Germany
Tenancy Regulations - how to increase your tenant´s rent to achieve maximum
yield-
Community Charge = "Hausgeld" = Monthly maintenance service
charge
What does the Community Charges = Home Owners Service
Fees include?
Definition of Hausgeld = Monthly Service Charge, Home
Owners Fee:
The homeowners' association fee ( also called "Community
Charges" or in German "Hausgeld" ) is the prorated share of the building's
monthly operating and property management expenses. It usually comprises the
property management fee for the building, operating expenses for common areas
like the elevators (lifts) or central heating, and reserves. The actual
operating expenses can be passed on to the tenant. The property management fees
and reserves are borne by the owner. The tenant's share is approximately 80%,
the owner's share approximately 20% of the community fee. The monthly charge is
estimated in advance based on a business plan approved by the homeowners'
association. The reconciliation is done yearly by the building's property
management.
When you own an apartment in Germany, you pay a monthly charge
which includes:
- "Cold communal charges" ( in German "kalte Betriebskosten" ). These
are items like lighting (entrance, staircase), expenses for lift / elevator,
electricity, caretaker, rubbish / garbage collection, bio rubbish disposal,
cleaning of building and staircase, snow ploughing, gardening, general
maintenance, house insurance, sewage water, cold water, etc.
- "Warm communal charges" ( in German "warme Betriebskosten" ), which
is heating and hot water. The warm charges tend to be most
expensive parts of the Hausgeld.
- Management fee and contribution towards the Community fund
(also called "sinking fund" or "maintenance fund" ).
If you find this confusing, then don´t
worry. Your tenancy administrator will take care of it. You can also phone us
for an interview and we´re happy to explain all details to you over the
telephone or in person. Consult our email for our direct telephone
number.
Who pay the community charge - the owner or the
tenant ?
The tenants prepays the "cold" and "warm" communal charges
to the owner / landlord.
The amount is based on an estimate of the previous
year´s consumption.
Calculation of Community
Charges / Service Charge / Maintenance Allowance
(figures are approximate)
|
2.50 €/m² |
heating, hot water, cold water, sewage water, rubbish collection, insurance,
caretaker, cleaning, electricity, gardening, etc.
The actual operating
expenses are passed on to the tenant. |
Tenant |
|
0.90 €/m² |
Home Owners Fund, also called sinking fund or reserve maintenance fund (which
represents the community´s savings account) is approximately 0.50€ y
0.70€/m² and minor general maintenance 0.20€/m² |
Owner |
|
25 € |
Administration |
Owner |
In general terms, 70% of the community charge has to be paid by the
tenant and 30% by the owner.
For a 50m² apartment, expect to have
approximately 170-200€ community charges.
If apartment is vacant,
you will probably get a major part of your heating/water prepayments refunded
the following year. |
In general terms, if the property is tenanted, the tenants pay
roughly 80% of the Home Owners Fee. The items the tenant does not pay is the
building management fee (25€/month), minor maintenance of the building
(normally negligeable) and the contribution towards your community
fund.
The tenant pays base rent (also "cold" rent) plus a
prepayment (which is an estimate) towards his/her share of the community
charges (heating/water etc).
Each flat has individual meters for hot &
cold water and heating. The house administration reads the meters on a yearly
basis, then issues an invoice which figures complete meter
readings.
Meter readings: Each radiator has an individual meter with
a specific number which is unique to that meter, so no confusion can occur. The
same for hot water and cold water usage.
Meters are being read by officially
appointed "meter reading companies". They pass the data in digitalised form to
the condomium administrator who prepares yearly statement for each
apartment.
If the tenant prepaid too much over the year, he/she will get a
refund, if he/she did not pay enough, there will be a re-charge. Calculate your Rental Yield
Contribution towards Community Fund - also called "Reserve Fund" or "Home
Owners Fund"
It is important that a property is well managed and
therefore a monthly payment towards the Reserve Fund should be made. In German
it´s called "Rücklagen" which means "Reserves for
Contingencies".
This money is being used when major refurbishments or
renovations of the building are necessary.
Deducting the contribution for
your Community Fund from your rental yield calculations could be a
mistake:
Sooner or later, you will have to spend money on renovation,
regardless if you own the entire building or a single apartment. Instead of
having to pay a lump sum in one year and nothing next year, the reserve funds
helps to spread the payments. It also protects proprietors from potentially
insolvent co-owners since large lump sum payments are being avoided.
The
only position that affects your long-term yield is the
administration fee since this is considered an expense in the stricter sense.
The reserve fund is merely your share in the savings account of the community.
It is money saved up of which you own a percentage. Since the community saves
to maintain the building in decent condition, your sales price will be higher
when you sell the property in later years.
Easy maintenance:
Owning a tenanted apartment is hasslefree: Your
rental manager will take care of everything for you. You don´t have to do
anything except wait for your monthly surplus payments (rent minus charges)
which will be credited on your bank account in your country of residence. You
can request monthly pdf statements by email.
If you use the apartment
yourself, you can issue a standing order (direct debit) and the condominium
administrator will debit the monthly charge.
Owning a tenanted or vacant
property in Germany is really easy. Everything will be taken care of by your
management agent. It´s a truly hasslefree "hands-off"
operation.
For further questions, we are here to help anytime.
Kindly get in touch by email.
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