Heating data should reach the tenant before the bill does

In most of the 8,900 centrally heated buildings my company owns, a tenant learns what last winter's heating cost about a year after the winter ended. German rules require landlords to bill heating and hot water largely according to measured consumption, and to deliver the annual service-charge statement within twelve months of the end of the billing period. Our heating year closes in December. Readings are collected, fuel and maintenance costs reconciled, the metering service provider divides the costs between flats, and statements go out in waves through the following year. For a tenant who used too much in January, the news can arrive twenty months later as a demand for arrears.

That delay is nobody's fault in particular. It is how the system was designed when meters were read once a year by a person with a clipboard. But the data no longer has to travel that way, and I have come to believe that a landlord's priorities for heating data should be reversed. The tenant's need to manage consumption should come first. The bill should come second.

A statement that arrives a year late

Consider what an annual heating statement is for. Legally, it allocates costs fairly between flats. Commercially, it settles advance payments against actual costs. For the tenant, it is usually the only information they have ever received about their own consumption, and it comes far too late to change anything.

When heating prices rose sharply in 2022, the delay became a hardship. Advance payments set at the previous year's prices were too low. Tenants who could have turned the thermostat down by a degree in November 2022 discovered what that winter had cost them in the autumn of 2023. That round of statements produced arrears for about 41 per cent of our centrally heated flats, against 17 per cent a year earlier, and our receivables team arranged instalments for more than 9,000 households. Many of them would have behaved differently had they known sooner.

The 2021 amendment of the Heating Costs Ordinance requires landlords to give tenants monthly consumption information wherever meters and heat-cost allocators can be read remotely, and the remaining devices are to become remotely readable by the end of 2026. The intention is right. The question is whether landlords treat the monthly figure as a compliance task or as the most useful piece of data they send.

Monthly figures nobody reads

Our first year of monthly information was compliance done badly. The metering service providers offered a portal that showed consumption in allocator units, which tenants could not convert into euros or kilowatt hours, and we sent a monthly email linking to it. Fewer than one tenant in nine opened the portal more than twice.

We rebuilt the message in 2024. It now shows the month's consumption beside the same month a year earlier, an estimate in euros at the current price, and a comparison with flats of similar size in the same building, so a tenant can see whether a high figure belongs to the flat or to the weather. Tenants without email receive a printed summary every quarter, which costs about €380,000 a year in printing and postage and was argued over at length. Around 38 per cent of tenants now look at the monthly figure at least every other month.

I cannot prove that the messages reduced consumption; prices, weather and public mood moved too much at once. What I can show is that tenants who read them often adjust their advance payments themselves, and that arrears at settlement have fallen faster in their buildings than elsewhere. The annual statement has become less of an ambush, and that alone justifies the effort.

The figures have limits we must admit. Allocators fixed to radiators record relative heat output rather than energy, and in a poorly insulated building one flat's consumption depends heavily on whether its neighbours heat theirs. A comparison with similar flats helps. Implying that consumption is wholly within a tenant's control would be dishonest, and our message says so.

Language matters as much as format. About one in five of our households reads German as a second language, so since 2025 the message has been available in six languages, chosen from those our caretakers most often hear in the stairwells. The printed version uses larger type and a single chart. These details sound minor. They were the difference between a figure that is sent and a figure that is read.

Carbon costs make the floor area matter

Since 2023 a second calculation has made heating data matter more to the landlord. German law now divides the carbon price on heating fuels between landlord and tenant according to the building's emissions per square metre of living area. In a ten-step model the landlord's share rises as the building's performance worsens, so the owners of the least efficient buildings carry most of the cost.

The law turned two figures that many landlords treated as administrative into figures with money attached: the emissions from the fuel, which suppliers now state on their invoices, and the building's heated living area. The second proved harder. In 2024, preparing statements for 2023, we found that heated area in our building records disagreed with the sum of leased areas by more than five per cent in about 1,240 buildings, roughly 14 per cent of those we heat centrally. Some differences came from attic flats added after the original plans, some from cellars counted in one record and not the other, and some from plain errors.

Where we could not resolve the difference in time, we placed the building in the step more favourable to its tenants. That cost us about €0.9 million beyond our best estimate, on a total carbon cost of roughly €11 million for the year. Colleagues in controlling argued for the midpoint and a later correction, which was a respectable view. I argued that a tenant should not carry the cost of our record-keeping, even temporarily. By the 2025 statements the unresolved buildings were down to about 190.

This is why I argue that heating data should be governed as tenant data first. The same reading feeds a monthly message, an annual statement and a carbon split, and in each case the person most affected by an error is the tenant. A landlord that designs its data for the bill will tolerate a slow, unexplained figure. A landlord that designs it for the tenant will find that the bill becomes easier to defend as well.