Understanding rental charges and their statement

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When you offer your property for rental, in return you charge a rent for the use of the property itself. In addition, the rent is supplemented by costs associated with the rental, commonly known as service charges or building charges, which must be listed in the rental contract under the heading "heating and ancillary costs". These costs may include heating, electricity, caretaker, landscaping and many others. We'd like to give you a quick overview of what can be included in these charges and the different ways in which they can be passed on to your tenants.

First of all, what can be included (or not) in heating and ancillary costs?

It's vital to know what costs can be charged in addition to the rent. Let's start with heating and hot water. These include the following:

  • Fuel and energy consumed (electricity, etc.): actual energy consumption for the relevant time frame
  • Electrical energy used for the heat pump
  • Periodic servicing of the heating system, including the heat pump, and descaling of the hot water system, water heaters and pipes
  • Measuring, billing and maintenance of equipment, such as meters, when heating costs are calculated individually
  • Electricity for shared premises
  • Administrative costs

The following costs are the responsibility of the owner and cannot be included in the heating costs:

  • Repair, refurbishment and replacement of installations (parts and wear)
  • Interest payments and depreciation of installations

Let's continue with ancillary expenses. These may include (but are not limited to) the following items:

  • Water and sewage tax
  • Household waste tax
  • Lift (maintenance subscription)
  • Landscaping
  • Washing machine maintenance subscription
  • Caretaking
  • Administrative fees

Ancillary costs may not include the following items:

  • Expenses associated with putting the property up for rent
  • Building insurance
  • Property tax
  • Mortgage interest
  • Loan amortization
  • Owner's expenses relating to the maintenance of the building, such as the cost of repairing/replacing defective installations or the cost of renovating or improving the building

Rules to be respected in the rental contract

Heating and ancillary costs that are charged in addition to the rent must be clearly described in the rental agreement. Otherwise, these costs are considered to be included in the rent and the owner cannot, in principle, charge the tenant extra for them. There are a few exceptions: the cost of maintaining the heat pump is considered a heating cost and does not have to be shown separately in the contract. The same applies to descaling the water heater, which is part of the cost of hot water.

How can service charges be billed to a tenant?

In Switzerland, owners have four options for billing heating and ancillary costs:

1. All-inclusive rental

This is the simplest solution from an administrative point of view for the owner who rents directly (fixed term).

This method is more appropriate for furnished accommodation, where it is difficult to re-invoice charges. No statement or proof of charges needs to be provided. The lease contract describes the charges included in the rent (hot water, heating, etc.).

2. Flat-rate charges

Be careful to calculate the charges correctly from the outset, as the monthly charges are fixed at the start of the lease and no actual statement is provided to the tenant. The monthly charges represent a three-year average of the actual charges for the rented property.

3. Individual charges to third parties

This method is typically used when renting a detached villa, for example, where the question of apportioning charges does not arise. The tenant pays his charges directly to the supplier.

4. Actual charges or by instalment: the standard method and the most accurate one

This is the fairest and most accurate method for both the tenant and the owner. The tenant pays a monthly instalment of service charges. They receive an actual statement at the end of the period specifying any adjustments to be made (in their favour or against). The owner is obliged to provide the tenant with an accurate, detailed statement every year.

This method usually requires the services of a professional such as Climkit.

Statement of charges

A statement of charges is therefore necessary in the majority of cases. It shows the actual expenditure for each property and calculates the difference between the deposit already paid by the tenant and the actual expenditure incurred by the owner during the year. For tenants to understand the charges invoiced, they must be able to identify and understand the breakdown of charges and their costs. The owner may ask for additional payments if the provision is less than the exact amount of the rental charges.

If there is any justified doubt about the statement, the tenant may ask to see the supporting documents.

DIFEE/VEWA regulations

In 2017, the regulations governing this statement were modernised. The new individual billing of energy and water costs (DIFEE in French or VEWA in German) now ensures transparency and fairness, while encouraging responsible use of resources.

It is important to note, however, that this model only applies to new buildings, and that the old model for individual billing of heating and hot water costs (DIFC/VHKA) and individual billing of water costs (DIFE/VWKA) is still valid for use in older buildings.

This calculation model was created to harmonise the method used, simplify it and adapt it to the new building standards. New buildings must be built to modern, high insulation standards, which means that the corrective factor for flat exposure (north, south, inside or outside facade) used in the previous model can no longer be applied.

Thanks to DIFEE/VEWA, the costs billed to each property are more accurate and truly correspond to the flat's consumption, because individual meters are used for heating, hot water and cold water. At the same time, each resident has access to information that enables him to take control of it's own consumption.

As part of a building with divided ownership (PPE)

For owners who are members of a PPE, costs are apportioned in accordance with the rules of the PPE, without the constraints of tenancy law. The rules of the PPE apply. In modern buildings, however, the DIFEE/VEWA method is used for apportionment, with individual consumption meters.

Please note that if one of the co-owners rents out his flat, he becomes the owner to his sole tenant. In this situation, he or she must comply with the provisions of tenancy law.

To conclude, with the new meters associated with the DIFEE/VEWA regulations, managing service charges is much simpler because their breakdown is more accurate. However, they do not do everything, and it is important to respect the rules mentioned above to avoid financial consequences such as reimbursement of advance payments received.

About Climkit

Climkit has been promoting the production of photovoltaic electricity since the launch of its solution in 2017 for managing the self-consumption groups in Vevey (VD).

Since then, we have extended our offer to all forms of energy and consumption in a building: heat, cold, water, laundry, electric mobility, etc. We facilitate the management of your building thanks to our counting, billing, visualization and optimization tools. Active throughout Switzerland, we work with local professional companies for the design and installation of our products. We're also proud that our Community solution has been approved by the Solar Impulse Foundation.

Our entire team is available to assist you in your projects, as we support the 1500 RCPs who place their trust in us!