Engel & Völkers
  • 1 min read

What are operating costs?

We are talking about operating costs, also known as additional rent or second rent. Which items are included and appear in the annual statement?

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Operating costs are ongoing, regularly recurring costs associated with the property. Rental agreements typically stipulate that, in addition to the base rent, the tenant must also cover the operating costs of the property. For such an agreement to be valid, however, all additional costs must be listed. A phrasing such as “the usual additional costs of the apartment” would be too vague.

Table of Content

  1. Apportionable operating costs

  2. Operating cost statement

  3. A correct operating cost statement must include the following details:

Apportionable operating costs

However, landlords cannot pass on every type of operating cost to the tenant, but only those explicitly listed in the Operating Costs Ordinance:

  • Property tax

  • Water and sewage costs

  • Heating and hot water costs

  • Elevator costs

  • Street cleaning and waste disposal costs

  • Garden maintenance costs

  • Lighting costs

  • Chimney cleaning costs

  • Property and liability insurance costs

  • Janitor costs (partially)

  • Costs for communal antenna systems and laundry facilities

  • Other operating costs

Costs such as gutter cleaning must be explicitly stated in the rental agreement.

Operating cost statement

The landlord must present the operating cost statement no later than one year after the end of the billing period. For a typical billing period from January 1 to December 31, this means by December 31 of the following year. After that, the tenant generally cannot be required to pay additional amounts, unless the landlord is not at fault for the delay. An exceptional situation arises, for example, if the city does not send the property tax assessment on time. The landlord, however, is responsible for any delays caused by a company commissioned to prepare the statement.

A correct operating cost statement must include the following details:

  • Compilation of the total costs for the entire property being billed

  • Indication and explanation of the allocation keys used

  • Calculation of the share attributable to the rented apartment for each type of operating cost, which the tenant must pay

  • Deduction of tenant advance payments

An operating cost statement that does not include these details is formally invalid and does not establish any claim for the landlord. Administrative costs, maintenance reserves, or repair costs cannot be passed on to the tenant.

In disputes with the landlord over operating costs, tenant associations, consumer protection agencies, and specialized law firms can assist. They review the statement and provide advice.

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