Energy costs constitute a significant portion of a property’s monthly operating expenses. With the ever-increasing prices of electricity and fossil fuels, landlords and tenants are facing significant challenges in the upcoming period.
Heating, electricity, and hot water costs are generally considered “recoverable operating costs” of a property. These costs are usually settled through monthly advance payments agreed upon in the lease contract. At the end of the accounting period, the landlord prepares an annual utility bill, where any excess or shortfall in the advance payments is refunded to or billed to the tenant.
Upcoming Utility Bills
Given the rising prices, it is expected that upcoming utility bills will be considerably higher than in previous years. For this reason, it is in the mutual interest of both parties to increase the monthly advance payment for operating costs. By doing so, landlords do not have to bear the costs in advance, and tenants may avoid financial strain when the utility bill is due.
Transparency is crucial for both parties, and tenants can contribute significantly to reducing the cost burden through individual behavior. However, when it comes to energy conservation, especially during winter, it is important to be mindful of the risk of mold formation. Cold air can hold less moisture, increasing the risk of mold growth, especially on cold walls exposed to moisture over an extended period. Therefore, it is advisable to use proper ventilation methods to remove excess moisture from the apartment without excessively cooling it down.
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