Do I have to pay the homeowner association fee (“Hausgeld”) per month or per year?

The homeowner association fee (“Hausgeld”) is an important point of the monthly costs for people investing into real estate in Germany

 Everyone who owns a house, apartment, or other real estate property in Germany has to pay a fee to the homeowner association on a regular basis. This fee is to cover for the ongoing expenses that are incurred for the property, such as maintenance and upkeep costs, insurance, cleaning costs, etc. 

The amount of money varies depending on the property and the residential area. But how and when do you have to pay this homeowner association fee, and how is it composed? That's exactly what this blog post is about.

Do owners have to pay the homeowner association fee per month or per year?

In most cases, as a real estate owner, you will have to pay the homeowner association fee on a monthly basis. Often, the entire year's worth of the fee would officially be due at the beginning of the year, but in almost all cases, the payment is deferred and split over the 12 months of the year. This means you pay a fraction of the total amount each month.

This of course has a lot of benefits for you as a homeowner, especially that you can better fit the payment into your monthly budget, and don't have to pay it all at once.

How is the house payment calculated?

Each year, a plan is drafted from which the homeowner association fee is derived. This plan is based on the planned costs for the current year. The costs are allocated to the individual parties depending on how many square meters of living space each one has. This then results in the monthly charge, which each owner has to pay.

What costs are included in the house charge?

You are wondering what costs are included in the house money? Well, roughly speaking, the homeowner association fee includes all costs incurred for the maintenance and operation of the house.

In addition to the costs for cleaning, maintenance and the upkeep of the building, for example, the costs for the (communal) water and electricity bills as well as the costs for insurance are also included in the homeowner association fee. Also, the costs for administration are also included in the fees.

It's important to note that only the costs that are incurred outside of your apartment are included in those fees. For example, if you heat with an individual gas heating system just for your apartment, those costs are not included in the homeowner association fees, but you have to budget for these costs yourself, and they come on top of the normal fee.

Neither are the costs for the maintenance of your apartment or the costs for the electricity within your individual apartment included in the homeowner association fee.

Can I pass on the homeowner association fee to my tenant?

Are you wondering if you can pass on the house money to your tenant? The answer is "yes, but”....

There is an apportionable part and a non-apportionable part of the fees. Only the apportionable part can be passed on to the tenant.

The non-apportionable part must be borne by you, the landlord, and you must earn that money through the normal rent.

But what is the difference between these two parts?

The apportionable part is the part of the homeowner association fee that is used for the general costs of the house, such as cleaning the common area, garden maintenance or the electricity supply in the stairwell.

The non-apportionable part is the part of the homeowner association fee that cannot be passed on to the tenant via the Operating Costs Ordinance (“Betriebskostenverordnung”). This mainly includes the costs of maintaining and modernizing the building.

The precise definition of which costs can be passed on to the tenant and which costs cannot be passed on to the tenant are fixed in the “Betriebskostenverordnung”.

Conclusion

You have to pay the homeowner association fee for a condominium on a monthly basis. The fee is therefore a monthly cost and therefore an important part in the cashflow consideration of a property, which you must consider in your monthly costs for the property.

Since you can pass on a part of the fee to the tenants, you should definitely account for this when you do the cashflow calculation of a property as an investment.

Since the heating costs may also include consumption-dependent costs caused by your tenant, it is possible that you will have to pay an additional homeowner association fee at the end of the year, because your tenant ran up higher costs than initially planned. Therefore, you should make sure that you have a sufficiently large buffer so that you can bridge such additional payments without any problems.