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Can I refuse to pay a German service-charge back payment?
Late statements, formal defects and refused inspection: when you may withhold, when to pay under reservation, and what default costs.
A large back payment (Nachzahlung) rarely arrives at a convenient moment. If the statement also raises questions, the idea of simply not paying is tempting. Sometimes that is right; sometimes it is expensive. This guide sets out the options, their conditions and how to protect yourself. It covers residential tenancies in Germany and is not individual legal advice.
Check first, decide afterwards
The payment question comes at the end of a review, not at the beginning. Clarify three points first: did the statement arrive within the deadline, does it contain the minimum formal information, and are there items that look substantively doubtful? Only then can you judge whether and how much to pay.
There is a practical reason for that order. Refusing first and checking later easily puts you in default without a defensible reason to give.
The clear case: a late statement
Under section 556(3) BGB the statement must be notified by the end of the twelfth month after the end of the billing period. After that a back claim is generally excluded, unless the landlord is not responsible for the delay.
If your statement clearly arrived late, the claim is doubtful in principle. Say so in writing, give the period, the deadline and your date of receipt, and ask for an explanation of the exception relied on. A credit balance in your favour is unaffected by the deadline.
Formal defects
A statement must contain an orderly compilation of income and expenditure. The Federal Court of Justice has specified the requirement: for the total costs it is sufficient to state the sum attributable to the chosen billing unit (BGH, judgment of 20 January 2016 – VIII ZR 93/15). If, however, the allocation keys, your shares or the deduction of prepayments are missing entirely, the statement cannot be followed.
A statement that is not properly drawn up does not generally trigger an obligation to pay the back charge. Point to the defect concretely and ask for a proper statement.
Withholding because inspection is refused
If you are not allowed to inspect the documents, you may have a temporary right to refuse performance in respect of the back payment. That presupposes a real denial of the right in section 556(4) BGB: if complete, legible documents are provided electronically, the right is satisfied, because sentence 2 of that provision expressly allows that form. The Federal Court of Justice affirmed this where inspection of invoices was granted but inspection of payment records refused (BGH, judgment of 9 December 2020 – VIII ZR 118/19).
Timing is decisive. After paying in full you cannot reclaim the amount merely because inspection was inadequate (BGH, order of 26 October 2021 – VIII ZR 150/20). Ask for inspection before you pay and document any refusal.
Individual disputed items
Where a single item is doubtful, refusing the entire payment is usually disproportionate. The sensible course is to split: pay the undisputed part and expressly withhold the disputed amount. Quantify both in your letter.
Example: "Of the back payment of €640.00 I am transferring the undisputed amount of €352.00. I am withholding the €288.00 attributable to the item 'Verwaltungskosten' until it is explained or corrected."
Paying under reservation
If you want to avoid a dispute or are worried about a termination, you can pay under reservation. Write the reservation in your covering letter and in the payment reference: "Zahlung unter Vorbehalt der Rückforderung" (payment subject to reclaim).
A reservation does not help in every constellation. If your only objection is inadequate inspection of documents, it does not secure a reclaim under the case law cited above. Clarify that point beforehand.
What default costs
Failing to pay a claim that is in fact due puts you in default under section 286 BGB. Default interest and reminder costs can arise. Substantial arrears can in extreme cases justify a termination. A blanket refusal without reasons is therefore risky.
As long as you name a concrete reason and pay the undisputed part, your position is considerably better. Keep the correspondence written and factual.
Two deadlines run in parallel
The payment deadline in the statement and your twelve-month objection period under section 556(3) BGB run at the same time. The payment deadline is usually short; the objection period is long. So respond quickly to the payment deadline even if you still have time for the substantive review.
A short interim reply is enough: "I am reviewing the statement and have requested inspection of the documents. I will transfer the undisputed part by …"
If you cannot afford the payment
Not every refusal is legally motivated. If a justified back payment exceeds your budget, the practical route is an instalment agreement. Ask in writing, propose concrete instalments and then keep to them. An accepted instalment agreement generally rules out a termination for arrears in respect of the agreed amounts.
Keep this separate from substantive objections. Asking for instalments while disputing the claim sends a contradictory signal. Write in two stages instead: first the objections, then — in case the claim stands — the request for instalments.
If you receive social benefits
If you receive Bürgergeld or basic security, a back payment for heating and operating costs can be recognised as a need. Timing matters: the need arises in the month in which the claim falls due. Submit the statement promptly and apply for it to be covered, rather than waiting for a reminder.
That does not change your review. An authority also covers only justified claims, and objections to individual items remain your responsibility.
Setting off a credit
If you have a credit from an earlier year that has not been paid out, a set-off may be possible. Declare it expressly and quantify both amounts. Check first whether your lease restricts set-off; such clauses in standard-form leases are only valid to a limited extent, but you should know about them.
Read on and check your own bill
For writing your objections, see objecting to a statement. For seeing the invoices, see inspecting the invoices, and for the timing rules, the service-charge deadline.
Before deciding about payment, you should know what is in the statement: the free check shows the conspicuous items and the calculated deadline in a few minutes.