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Changes in the summary account for utilities in residential buildings

The act regulating certain issues related to utilities for residential units and non-residential premises in residential buildings (Act No. 67/2013 Sb.) took effect on 1 January 2014. What changes have actually been made since 2013 when the Act was enacted?

The purpose of the Act is to harmonise the fragmented utilities legislation.

The Utilities Act applies to residential units and non-residential units in residential buildings and regulates the provision of utilities, advance payments, separate billing, summary accounts and settlement of costs.

In our opinion, the most important change introduced by the Act is the specification of a time limit in which the provider is required to account for utilities provided. The summary account is to be delivered to the recipients of the services within four months of the end of the billing period. Before the Act took effect, utilities were usually accounted for within six months of the end of the period for which the billing is made. Besides residential buildings, this will apply by analogy to leased non-residential premises in residential buildings, such as offices.

Utilities means: “the supply of heat and centralised supply of hot water, supply of water and discharge of sewage, lift operation, lighting in common areas of the building, cleaning in common areas of the building, sewage disposal and cesspit cleaning, enabling the reception of radio and TV signal reception, chimney operation and cleaning, and waste collection” (Section 4 (1)). However, the scope may be changed by agreement or a decision of the cooperative or the unit owners association.

Under Section 7 (2) of the Act, the provider must state the actual amount of the costs of utilities, classified according to the type of the service provided, including the total amount of advance payments received and the total amount of the costs of services.

The service provider is still entitled to request advance payments on such services. However, the advance payments must be reasonable (e.g. based on the previous period). The provider may change the advance payments during the course of the year, but such advances may only be requested after the delivery of a written notice on the change, including sufficient justification, “otherwise no increase in the advance payment shall be made” (as stipulated in Section 4 (4)). Section 4 of the Utilities Act also provides that “all arrangements under this Act must be in writing”.

The billing for individual services is regulated in Sections 5 and 6, providing that, if no agreement is made between the provider and the recipients, the procedure under Decree No. 372/2001 Sb. will apply.

This new regulation will give many accountants a hard time. They would definitely agree that even the established deadline of 30 June was sometimes difficult to meet. From now on, all suppliers will have to be pressured to provide all necessary documents in time. In some cases, also the billing period (e.g. for gas) will have to be limited so that related invoices can be included in the summary account. The first year governed by the Utilities Act will be 2014, and hence the utilities for 2013 will be billed in accordance with the previous rules.

In addition to the above, certain modifications have been made in respect of unit owners associations. Under Section 1200 (3) of the new Civil Code, the constitution must be in the form of a public instrument; as a result, any amendments to the constitution will require the presence of a notary. Therefore, any changes to the constitution that you might be considering should be made before the year-end (such as those related to the method of itemised billing of recipients for individual services).

If you have any questions regarding the billing, please do not hesitate to contact us.

 

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