Service charges: the Dutch landlord's annual settlement duty
Many landlords charge a monthly advance for service costs on top of the base rent. What is often forgotten: that advance is not extra rent but an advance on actual costs — and you are legally required to settle it with the tenant every year.
What are service charges?
Service charges cover supplies and services beyond the use of the dwelling itself, for example:
- gas, water and electricity (when billed through you);
- cleaning of communal areas;
- furniture and furnishings in furnished rentals;
- window cleaning, garden maintenance, caretaker.
Costs that belong to the property itself — major maintenance, building insurance, the structural part of VvE contributions, owner's municipal taxes — may not be passed on as service charges. Those belong in the base rent.
The annual settlement
No later than six months after the end of the calendar year you send the tenant an itemised statement: actual costs per item, the advance paid, and the difference. Overpaid advances must be refunded; underpayment may be charged on (provided the advance was reasonable).
Service charges must be cost-based: you may not make a profit on them. Since the Good Landlordship Act, an itemised, transparent settlement is explicitly mandatory.
What if you don't settle?
The tenant can go to the Rent Tribunal (regulated segment) or to court. The Tribunal then determines the service charges based on actual costs — and without proper records you will lose that argument. With furnished rentals this can amount to thousands of euros.
Practical tips
- Record per cost item. Book energy bills, cleaning and other service costs separately from maintenance.
- Keep the advance and base rent separate in the contract and in your records.
- Schedule the settlement. Set an annual reminder before 1 July.
- Adjust the advance after settling if actual costs structurally differ.
In Lentano you record income and expenses per property and per category, so the annual settlement is a matter of adding up instead of reconstructing.
Note: this is general information. Detailed rules apply to service charge disputes (Besluit servicekosten) — consult the Rent Tribunal or a lawyer.