Anyone who rents out property needs a separate account for each tenant: what’s due each month, what’s been received, and what’s outstanding. Rent, advance payments for utilities, and parking fees are deposited into the business account, often with partial or additional payments. We maintain rental accounts for each tenant and property and show you every month who is behind on payments.
Rental security deposits are not part of the landlord’s assets. For residential properties, they must be held separately under § 551(3) BGB, and the income from them belongs to the tenant. We track security deposits as a separate line item for each tenant, reconcile them with the security deposit account, and, if you instruct us to do so, offset them against outstanding balances when the tenant moves out.
Service charges are prepaid throughout the year and settled once a year. To make the settlement quick, we post apportionable costs by property and cost type, separate from costs you bear yourself. The tax advisor determines whether rents are VAT-exempt or whether you opt for VAT with commercial tenants; we then record the rents in separate accounts accordingly.
For maintenance and modernization, the key is proper allocation. The tax advisor decides whether an invoice is an immediate expense or part of the building’s acquisition or construction costs. We collect invoices by property and by project so that the tax advisor can make this determination without having to search through records. We record loans, including interest and principal payments, based on bank statements.
Real estate agents deal with different issues. The commission is earned when the brokered contract is concluded but is often paid only weeks later, sometimes half by the buyer and half by the seller, and in joint deals it is shared. We track each commission as an open item from closing until payment, record splits and referral commissions clearly, and show you what actually comes in each month.
Property management companies bill management fees per unit and for special services. The funds belonging to owners and homeowners’ associations are held in separate accounts and do not belong in the manager’s books. We post your fees and expenses and ensure that client funds and your own funds are never mixed, for example when a fee is transferred to you from a property account.
