Service charge advances (zálohy na služby)

How high should the advances be?

Advances should reflect expected costs, the scope of services and the circumstances of the flat. When setting them, start from the latest statement, the number of occupants and any known price changes. Don’t lower the advance just to make the flat’s total monthly cost look cheaper.

Keep the advances you collect separate from electricity or gas that the tenant contracts directly with a supplier – those are billed by the supplier. Likewise, the owner’s contribution to building management does not automatically become the tenant’s service charge advance. The payment breakdown should make clear what each amount stands for.

When you can change the advances

You may adjust the advance during the year if the price of a service changes or for other legitimate reasons. The new amount must correspond to the reason for the change. Send written notice with proper justification. You can require the new advance no earlier than the first day of the month following delivery. A notice without justification is not enough to raise it. Services Act (zákon o službách), § 4.

An illustrative example: Last year’s actual costs came to 42,000\u00a0Kč, or an average of 3,500\u00a0Kč a month. With the same costs, an advance of 2,500\u00a0Kč would leave an annual shortfall of 12,000\u00a0Kč. This is a basis for checking the setting, not a recipe for raising everyone’s advance by 1,000\u00a0Kč.

Also, don’t confuse an advance with a flat-rate service fee agreed in writing. Different rules apply to flat-rate payments, and for longer tenancies some services must be settled anyway. § 9 of the Act.