Utility costs for apartments: five things you should know

People often refer to utility costs as a second lot of rent. In reality, they are usually incurred in addition to the contractually agreed net rent. Depending on the apartment, the heated spaces and the actual prices, these costs can be significant.

Five points to remember about utility costs

1) Permissible utility costs in Switzerland

Utility costs must be set out in a transparent way in the lease agreement. This applies whether you’re paying on account or as a lump sum. Heating accounts for the largest proportion of the energy consumed each year – around two thirds.

Our article on saving on heating costs provides plenty of useful advice to help with this.

Permitted utility costs

• Heating and hot water
• Sewage
• Rubbish collection
• Janitor costs (billed for each apartment)
• Staircase cleaning
• Service subscriptions for heating or lift operation
• Shared electricity
• Washing machines (electricity and water consumption only)
• Fees for TV or cable connection
• Snow clearing
• Administrative costs

Impermissible utility costs

• Repairs to heating systems, washing machines or lifts
• Investments, replacement of components and appliances, etc.
• Conversions, renovations
• Replanting or landscaping of garden areas
• Property taxes, building insurance premiums (with exemptions for apartments subsidised by the Federal Government in accordance with the Condominium Act (WEG-Gesetz); this currently includes around 50,000 apartments across Switzerland).
• General public authority fees that are not directly related to the consumption and operation of the property

2) Billing period

When applying a system with payments on account, landlords and property owners are required to prepare a statement once a year. Billing periods from 1 July to 30 June of the following year are common. Billing may also be conducted per calendar year, depending on the canton and the landlord. Please note that by law, utility costs only become statute barred after five years, so you cannot rule out the possibility of subsequent claims.

In specific cantons, including Bern and Lucerne, model agreements provide for a shorter period. In those places, utility costs become statute barred after 18 or 24 months, depending on the general terms of the lease agreement.

3) Receipts and invoices

Only utility costs that are actually documented are legal. In principle, landlords do not have to present copies of all invoices on every occasion. However, tenants have the right to inspect the actual invoices and receipts.

The obligation to provide information also includes informing tenants about the system of apportionment used in the building. The costs of heating, lifts and building maintenance, for instance, are broken down for the individual apartments according to the amount of space or number of people living there. The right to inspect the receipts applies regardless of whether the landlord requests payments on account or a lump sum.

‘If, for example, your electricity or water costs are significantly higher this year than last year, you should check your bills,’ says Ruedi Spöndlin, a lawyer for the Swiss Tenants’ Association. Considerable fluctuations in heating costs are normal; following a warm winter, for instance, the amount due should decrease. However, if the price of oil rises, this could lead to higher heating costs for some buildings.

4) Deviations from payments on account

The matter of whether costs charged are allowed to be higher than the previous payments on account has already been raised many times in Swiss courts. The Swiss Tenants’ Association would welcome a limit of 15–20% on any such increases. However, the Swiss Federal Tribunal has decided that such a limit should not normally be invoked. In this specific case, it considered it justifiable for effective costs to exceed payment contributions on account by more than double.

Thomas Oberle, a lawyer at HEV Schweiz, the Swiss homeowners’ association, explains: ‘Of course, the landlord shouldn’t just grab any old figure out of thin air, but it’s worth bearing in mind that it is impossible to predict actual price trends or the consumption of individual tenants.’

5) Requesting average utility costs

‘Essentially, tenants should enquire in advance about how much the utility costs are likely to be,’ recommends Ruedi Spöndlin. Knowing that there’s no risk of excessive back payments will give them a sense of assurance. In practice, most experts recommend that before the contract is signed, tenants set up payments on account based on the average of the actual costs for the last three years.

Average utility costs in Switzerland

Pinning down average utility costs can be very tricky in Switzerland. Utility costs depend on countless different factors, not least the location of the apartment, the type of construction and the current cost of electricity.

As a rule of thumb, the average annual cost of heating each square metre of living space is around CHF 15. This amount should be lower in new buildings – usually no more than CHF 10 per square metre.

The Federal Statistical Office last published a rental price structure survey in 2003, collating average utility costs according to the number of rooms and age of the apartment. The study ‘Average rental price per square metre in CHF by number of rooms and canton’ is the successor to that rental price structure survey, but it no longer breaks down the utility costs.

Although the 2019 Household Budget Survey specifies average utility costs in Switzerland, it does not differentiate between tenants and owners. The numbers should therefore be treated with caution, although they can still serve as a guide.