How to bill tenants for services correctly?

The complete guide to billing services for landlords. Learn how to correctly calculate and divide the costs of utilities, water and other services between tenants.

TL;DR – Quick Answer

Service billing is the landlord's obligation to deliver to the tenant an overview of the actual service costs within 4 months of the end of the billing period. You have to add up all the costs (energy, water, waste, cleaning...), divide them according to the set key and compare them with the deposits. The result is either an overpayment (you get the money back) or an underpayment (the tenant pays extra).

Why service billing is important (and why landlords fear it)

Hands on heart – service billing is one of the least favorite activities of every landlord. It's like the "tax returns" of the rental world. Nobody likes it, but it has to be done. And if done wrong, it can end up in court. No fun.

But don't worry! After reading this article, you'll be handling your bills like a pro. You might even start to like it. Okay, that was a joke. But at least you won't put it off until the last moment.

What does the law say?

According to § 7 of Act No. 67/2013 Coll. about the services connected with the use of the apartments, as a lessor you are obliged to bill the services no later than 4 months after the end of the billing period. If your billing period is a calendar year (which is the most common case), you must deliver the bill by the end of April.

But beware – it is not enough to just "make" the bill. You must deliver it to the tenant. So if you send it on April 30th and the tenant receives it on May 3rd, you have a problem.

Step by step: How to bill services

Step 1: Gather all the documents

Before you start calculating, you need to have on hand:

  • Invoices from suppliers - electricity, gas, water, heat, waste removal
  • Meter balances – initial and final balances for the accounting period
  • Overview of paid advances – how much the tenant paid during the year
  • Rental agreement – where it is stated what services are included and how they are distributed

Pro tip: If you do not save these documents continuously, you will now be running like crazy. Next year, start a "Billing 2025" folder and throw everything in there as it comes in.

Step 2: Determine which services you are billing

Services associated with the use of the apartment typically include:

  1. Heat – heating costs
  2. Hot water – water heating
  3. Cold water and sewage – water and sewage
  4. Electricity in common areas - corridor lighting, lift
  5. Cleaning of common areas - if you provide it
  6. Waste removal – municipal waste
  7. Elevator operation – maintenance and revision
  8. Other services – according to the agreement in the rental agreement

Important: The service bill DOES NOT include the rent itself, the repair fund, or the costs of managing the house. These are different items.

Step 3: Choose the correct billing key

This is where things get complicated. You can divide the costs in several ways:

According to the floor area:

  • Suitable for: heat, lighting of common areas
  • Calculation: (apartment area / total area of all apartments) × total costs

According to the number of people:

  • Suitable for: water (if you do not have meters), waste
  • Calculation: (number of people in the apartment / total number of people) × total costs

According to actual consumption:

  • Suitable for: water, heat (if you have meters)
  • Calculation: exactly according to measured values

Equally:

  • Suitable for: some flat-rate services
  • Calculation: total costs / number of apartments

Step 4: Calculate the actual costs

Now comes the math part. Grab a calculator (or Excel, or even better Grento, but we'll get to that).

Example for heat:

Total heat costs for the house: Kč 120,000 Total floor area: 500 m² Tenant's apartment area: 65 m²

Tenant's share = (65 / 500) × 120,000 = 15,600 Kč

Example for metered water:

Tenant consumption: 45 m³ Price per 1 m³ (water + sewage): 95 Kč

Tenant costs = 45 × 95 = 4,275 Kč

Step 5: Compare with the advances

The tenant paid monthly advances for services of Kč 2,500, i.e. he paid Kč 30,000 per year.

Actual costs for all services: Kč 28,500

Result: Overpayment of Kč 1,500 (you return it to the tenant)

Step 6: Prepare billing

The bill must contain:

  • The period for which the bill is made
  • List of all services
  • Actual costs for each service
  • Used billing key
  • Amount of advance payments
  • Resulting overpayment or underpayment
  • Maturity date

Frequent billing errors (and how they avoid)

Mistake #1: Late Delivery

As we mentioned, you have 4 months. But keep in mind that the mail takes time and the tenant may not be at home. Send it by registered mail well in advance.

Solution: Send the bill by mid-March. You have a reserve and a good night's sleep.

Mistake #2: Missing documents

"I had the water bill somewhere..." Classic. And now you're running around to suppliers begging for copies.

Solution: Digitize. Scan invoices as soon as they arrive, or take pictures of them with your phone. Save to the cloud.

Mistake #3: Bad Billing Key

Using the number of people for heat? That's wrong. According to Decree No. 269/2015 Coll. heat costs are calculated according to the floor area and measured values.

Solution: Study the legislation or use software that knows it for you.

Mistake #4: You forget about VAT

Some services include VAT, some do not. Don't forget to factor in the actual costs including tax.

Mistake #5: Vague wording in the rental agreement

If you have "services based on actual costs" in the contract without further specification, this can lead to disputes.

Solution: In the rental agreement, specify exactly which services are included and how they settle the bill.

What to do if the tenant does not agree?

It happens. The tenant receives the bill and is not happy. What now?

  1. Allow access to documents - by law, the tenant has the right to view all invoices and documents
  2. Explain the calculation - calmly and matter-of-factly go through the individual items
  3. Correct any mistakes - nobody is infallible, if you made a mistake, admit it
  4. Document communications – e-mails, letters, keep everything

If you can't agree, the tenant can object. You have 30 days to answer them.

How Grento can help you

Grento automates the billing of services according to Czech legislation. Just enter the meter readings and the system will generate a complete bill.

  • Automatic data collection - connection with the bank and suppliers
  • Correct billing keys - according to applicable legislation
  • Meter records - balances are entered continuously
  • Generation of documents - billing in a few clicks
  • Archive - all documents in one place

Summary

Billing for services is not rocket science, but requires diligence and proper documentation. Key Points:

  1. Meet the deadline 4 months after the end of the period
  2. Collect all invoices and meter balances
  3. Use the correct billing keys according to the type of service
  4. The bill must contain all legal requirements
  5. Archive documents for possible questions

Remember - it is better to get the bill right the first time than to deal with complaints and disputes later. Good luck!

> Czech-law scope and editorial note: Legal, tax, accounting, tenancy, service-charge, condominium, metrology, insurance and data-protection statements in this article refer to the Czech Republic and the rules effective for the relevant date. Figures and examples are illustrative, not legal or tax advice. Verify current rules with the relevant Czech authority or a qualified adviser.

> Service-accounting clarification: Under Czech Act No. 67/2013 Coll., distinguish delivery of the settlement within four months after the accounting period, financial settlement generally within four months after delivery, and the separate 30-day periods for supporting documents or objections under § 8. A statutory per-day penalty under § 13 is conditional; verify the current amount and cap rather than applying a universal figure.

> Metrology and heat clarification: Verification periods depend on the instrument type and current UNMZ rule. Heat allocation uses the current Czech decree and may use a 40%, 50% or 60% basic component according to building energy performance, with possible adjustments; hot-water allocation is separate. Do not treat a 30/70 or ±20% statement as universal.