If there were such a thing as a spook word of the year, it would be this in 2022: utility bills. Many are afraid of what is to come, with rising energy prices, gas shortages and inflation. “It’s getting more expensive” is the tenor of the reporting. But how much more expensive? Who knows.
Utility bills that tenants of private and commercial properties receive from their landlords once a year are complex. In this, landlords calculate deductions already made against the actual expenses for heating costs and water, for example, but also building maintenance, maintenance of certain technical systems, expenses for the caretaker, the gardener and so on, which are apportioned proportionately to the individual parties of a residential unit.
In the best case, the tenant gets something back, is happy and does not look at the pages of figures any further. In the not so favorable case, he has to pay something extra. If the amount is not too high, most people pay and don’t look closely at the bill either.
Chris Möller knows that it could be worth it. And if, as is to be expected, the ancillary cost bills are higher in the coming years, then even more so. “81 percent of all utility bills are incorrect,” says Möller. On average, these mistakes cost tenants 220 euros, which is how much they pay too much on average.
The Berlin founder knows this because he and his company Mineko have already checked more than 100,000 such ancillary cost statements from private tenants. The start-up has also been examining the ancillary costs of commercial real estate for three years.
Mistakes are even more expensive for tenants. In the case of catering establishments, for example, this can quickly be a five-digit amount, reports Möller. On average, commercial tenants paid 500 euros too much per 100 square meters.
Möller founded the start-up in 2014 – just another company for him. Möller is definitely considered a serial founder, because he also founded Erento, a marketplace for rental items such as beer garden sets, and Campanda, a mobile home rental company, and made successful exits.
Since 2019, he has primarily been responsible for the digital ancillary rental cost check service. An impressively large market: in 2019 alone, Germans paid 70 billion euros in additional costs. Some of it too much.
But what is actually going on there, apparently the vast majority of landlords want to rip off their tenants? No, explains Möller, it’s not like that, you can’t speak of cheating. Mistakes happen – for different reasons: “For the four tenants, the ancillary costs are a transitory item,” he explains.
The easiest way for him would be to throw everything he has paid into one pot and divide it by the 30 rental units in his property, for example. But that’s not possible, because the 30 tenants often have different leases. There are many costs for which the assignment must be contractually regulated. And so, for example, some of the tenants state that the maintenance of the community garden will be allocated, while others do not.
This can also be the case with commercial properties: The lease of the café on the ground floor states that the company must contribute to the costs of maintaining the air conditioning system. The dentist above, who uses the same air conditioning system, doesn’t have that in the contract because the system didn’t exist when he moved here.
There are also things that cannot generally be passed on, such as new plantings in the garden, terrorism insurance for commercial units. Nevertheless, these costs can slip into the bill under “Other”. And there are things that are regulated differently from one federal state to the next, so a nationwide active landlord can sometimes be billed incorrectly. And sometimes things like this happen, there is also the roof maintenance (non-transferable) for 5000 euros (for whatever reason) charged under “gutter cleaning” for 1000 euros.
These are just a few examples of hundreds of errors that Mineko can detect, partly with the help of artificial intelligence, but because it quickly reaches its limits when there are handwritten additions to rental agreements or the like, and partly with a constantly growing team from ancillary cost auditors. “Sometimes that’s quite a bit of detective work,” admits Möller.
To do this, the users send Mineko their rental agreement, the statement plus the cover letter in digital form. Cost point: 200 to 300 euros for tradespeople, 69 to 89 euros for private tenants – if you have legal expenses insurance with the residential block, you don’t pay anything, because then they will take care of it.
Important to know: Objections to an invoice can be made up to one year after receipt, even if the invoice has already been paid.
Mineko collects the data and creates its own correct ancillary cost statement, which can then be compared with the one received. The customer receives an approximately 30-page test report in which each item is explained. If the amount of an item deviates particularly far from the market average, the AI recognizes this and advises the customer to request a receipt from the landlord. It does happen, reports Möller, that the caretaker is listed under “caretaker costs” – but also again under “other”.
If there are errors in the billing, Mineko sends the user a completely pre-formulated letter of objection, which he can send to his landlord. “We work very de-escalatingly,” explains the founder. He is aware that the tenant-landlord relationship is very sensitive and that nobody wants to risk false additional costs because of 180 euros.
“Often the landlords are grateful when the letter comes from us, because then it is a qualified contradiction. There is nothing worse for them than when the tenant sits down and googles some judgments.”
This approach is paying off. Mineko’s customers also include many landlords, and Mineko checks bills for them before they send them to tenants: “Most of them want to do it right,” says Möller. His success rate is impressive: in the past, one of his customers would have received objections to 25 percent of the bills from his tenants. “With 16,000 apartments that this landlord manages, that’s 4,000 objections from 500 different lawyers and tenants’ associations – that’s a lot of work.” Mineko was able to reduce the rate to 3 percent.
And now it will probably soon get even thicker. Möller thinks that on average you have to expect a 100 percent increase in ancillary costs from 3,000 to 7,000 euros. “Heating costs are the largest part of the utility bill,” he says – and a common source of error. In addition, his auditors are already observing significant cost increases for all trades and craftsman services in the bills currently being processed for 2020.
He assumes that Mineko will be extremely in demand in the coming years – and is therefore currently looking for 100 new service charge auditors. Depending on experience and qualifications, he promises 25,000 to 60,000 euros for finding errors in the accounts.
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