In this article, you will learn everything important about the proper billing of services and the due date of overpayments or underpayments according to Act No. 67/2013 Coll., including current legislative changes and conclusions from the decision-making practice of the supreme courts.
Current Legal Regulation
Act No. 67/2013 Coll., the Act regulating certain matters related to the provision of services connected with the use of apartments and non-residential premises in a building with apartments, as amended (hereinafter referred to as the "Services Act"), contains the key provision of Section 7, which specifies the requirements for service billing, including the determination of due dates for overpayments and underpayments.
According to Section 7(1) of the Services Act, the service provider is obliged to prepare and deliver the billing statement to each service recipient no later than four months after the end of the billing period. According to Section 7(2) of the Services Act, the service provider must state in the proper billing statement the actual amount of costs for services broken down by the services provided with all necessary details, including the total amount of monthly advance payments received for services, so that the amount of any differences in the billing is clear and verifiable in terms of the methods and rules agreed for cost allocation.
Following the delivery of the billing statement, financial settlement occurs in accordance with Section 7(3) of the Services Act. The recipient will either be obliged to pay the underpayment, or an overpayment will be determined. The length of the period for their settlement depends on the agreement of the parties. The Services Act in its Section 7(3) subsidiarily sets the due date no later than 4 months from the time the billing statement was delivered.
Penalties for Delay under the Services Act
According to Section 13(1) of the Services Act, if the service provider fails to fulfill any of its obligations stipulated by the Services Act, in particular if the service provider fails to deliver the billing statement on time, it is obliged to pay the tenant a penalty, unless it would not be fair to require fulfillment of the obligations within the stipulated period or unless the failure to meet the deadline was caused by the tenant. If the amount of the penalty was not agreed upon, the penalty amounts to CZK 50 for each day or part thereof of delay, according to Section 13(2) of the Services Act.
In order for the above-mentioned obligation under Section 7(1) of the Services Act to be considered fulfilled, the delivered billing statement must be proper, i.e., it must contain the details specified in Section 7 of the Services Act, or in the contract between the provider and recipient and the relevant legal regulations. More information about the penalty for delay under the Services Act can be found in our general article at the following link: Penalty for Delay in Providing Service Billing for Apartment Rentals or in our more detailed article with relevant case law at this link: Reduction and Extinction of the Right to a Penalty for Late Billing.
Amendment to the Services Act
The amendment to the Services Act by Act No. 424/2022 Coll., effective from January 1, 2023 (hereinafter referred to as the "Amendment") brought about a significant change in Section 7(3) of the Services Act, which now explicitly states that defects in the billing statement do not affect the due date of the overpayment, and the due date of the underpayment is not affected by such defects in the billing statement that do not affect the calculated amount of the underpayment. The Amendment thus brought fundamental changes in the area of proper billing and due dates for overpayments or underpayments, which are in conflict with the existing decision-making practice of the supreme courts, which will be discussed below in this article.
The explanatory memorandum to this amendment, which is an annex to the already approved bill in parliamentary print 199/0 (hereinafter referred to as the "Explanatory Memorandum") states the following:
"This change is proposed in connection with Decree No. 376/2021 Coll., which amended Decree No. 269/2015 Coll. There has been a significant expansion of the scope of information that the service provider must include in the billing statement, which does not relate to the underpayment for services. It is not reasonable, for example, that failure to provide the website address where one can learn about options for increasing energy efficiency should cause the underpayment not to become due. Any omission of such an obligation is subject to a sufficient sanction under Section 13 of the Act. At the same time, it is explicitly stated that defects in the billing statement do not affect the due date of the overpayment. It cannot be allowed for the service provider to refuse to return the overpayment on advance payments for services to the service recipient by pointing to defects in the billing statement, when it is the provider itself who prepares (or has a third party prepare) the billing statement."
Defects that, according to the Explanatory Memorandum, affect the calculated amount of the underpayment include, for example:
- incorrect indication of the floor area of the service recipient's apartment or incorrect calculation of the countable floor area, which leads to an incorrectly calculated amount of underpayment;
- incorrect data on meter readings (whether for heat or water meters), which leads to an incorrectly calculated amount of underpayment;
- indication and use of incorrect coefficients for meter reading conversions, which leads to an incorrectly calculated amount of underpayment;
- indication of an incorrect amount of heating costs or hot water supply costs for the entire billing unit, which is allocated among service recipients, leading to an incorrectly calculated amount of underpayment;
- incorrect calculation of the average consumption component of heating costs per 1 m² of countable floor area in the billing unit (e.g., by omitting data from some service recipients), which leads to incorrect determination of limit values, and thus incorrect determination of the amount of the consumption component of costs for service recipients who exceeded the limit values, which naturally leads to incorrect allocation of heating costs in the entire billing unit, and thus to an incorrectly calculated amount of underpayment;
- simple mathematical errors in calculation, which lead to an incorrectly calculated amount of underpayment.
Conversely, defects that, according to the Explanatory Memorandum, do not affect the calculated amount of the underpayment include, for example:
- incorrectly indicated apartment number;
- incorrectly indicated name of the service recipient (typically in cases of women's surname changes in connection with marriage or divorce during the billing period);
- failure to provide information on the composition of energy sources used and on related annual greenhouse gas emissions for the billing unit for the last calendar year in cases specified by the implementing decree;
- description of individual taxes, fees, and other similar monetary payments included in the price of thermal energy supplied to the service provider from district heating systems and directly related to the amount of thermal energy supplied, in cases specified by the implementing decree;
- graphically prepared comparison of readings on meters installed according to the Metrology Act or installed devices for allocating heating costs at the service recipient for the current billing period and for the same period of the previous year, adjusted for climatic conditions in these periods according to the procedure in Annex No. 4 of the implementing decree;
- contact information for at least one energy consulting and information center located in the higher territorial self-governing unit where the billing unit is situated.
Existing Decision-Making Practice of the Supreme Courts of the Czech Republic
The existing decision-making practice of the supreme courts, especially the Supreme Court of the Czech Republic, played a key role in shaping the interpretation of proper service billing and the due dates for overpayments or underpayments. Below is an overview of key decisions along with selected citations.
Judgment of the Supreme Court of October 15, 2018, file no. 26 Cdo 312/2018:"In the last-mentioned decision, the Supreme Court also concluded that if the billing statement is not factually correct (proper), the landlord (service provider) has not fulfilled its obligation to bill the tenant (service recipient) for the actual amount of costs and advances for individual services, that this obligation therefore continues and the action for its imposition on the landlord – logically speaking – cannot be dismissed on the grounds that it has already been fulfilled (extinguished by fulfillment), and that in proceedings to establish the obligation to perform service billing provided with the tenancy, the court (therefore) examines (is obliged to examine) also the question of whether the service billing statement with which the defendant (landlord) acquainted the plaintiff (tenant) before the commencement of proceedings or during them was proper (i.e., in accordance with the lease agreement and with the legal regulations governing it)."
Judgment of the Supreme Court of May 22, 2019, file no. 26 Cdo 2338/2018: "The Supreme Court formulated and justified the conclusion that billing of payments for services provided with the use of apartments can only be referred to, and billing can only cause the due date of the underpayment arising from this billing, if it contains all prescribed requirements and if the price of the service performed is stated in the correct amount. Billing lacking any of the prescribed requirements or stating the price in an incorrect amount is not proper billing and is not capable of triggering the due date of the underpayment arising from the billing (even partially). For this to happen, the landlord would have to issue a new complete billing statement stating the price in the correct amount."
Judgment of the Supreme Court of April 26, 2022, file no. 26 Cdo 3141/2021: "A condition for the due date of the underpayment for services is the fact that the billing was performed properly (i.e., in accordance with the regulations governing it) and the tenant was acquainted with it (see judgments of the Supreme Court of November 26, 2003, file no. 21 Cdo 803/2002, of April 17, 2018, file no. 26 Cdo 5417/2016). Billing of payments for services provided with the use of an apartment can therefore only be referred to, and billing can only cause the due date of the underpayment arising from this billing, if it contains all prescribed requirements and if the price of the service performed is stated in the correct amount."
Judgment of the Supreme Court of October 18, 2022, file no. 26 Cdo 2181/2022: "The court therefore examines in proceedings for payment of an underpayment (overpayment) whether the service billing was performed properly and became due. The court deals with whether the service billing is proper (and the claimed entitlement therefore justified) regardless of whether the service recipient raised objections against it (cf. Section 8(2) of Act No. 67/2013 Coll.), because even the absence of objections cannot cure any inaccuracies in the billing."
Judgment of the Supreme Court of January 17, 2024, file no. 26 Cdo 731/2023: "In judicial practice (…) there is no doubt that if the subject of the dispute is an underpayment (overpayment) arising from service billing or the fulfillment of the service provider's obligation to perform billing, the court must consider whether the billing performed by the service provider is proper (i.e., in accordance with the regulations governing it), because only if the service billing contains all prescribed requirements and the price of the service performed is stated in the correct amount can the billing cause the due date of the underpayment (overpayment) arising from this billing and the service provider fulfill its obligation to bill the actual amount of costs and advances for individual services for each billing period." Furthermore, the appellate court elaborated in this judgment that: "If the court is to conclude whether the underpayment or overpayment from service billing is due, or whether the service provider fulfilled its obligation to perform billing, it must assess whether the billing is proper. However, it examines ex officio in particular whether the service provider stated in the billing all legally prescribed requirements and whether it is sufficiently comprehensible, i.e., whether the service recipient was able to check the correctness of data on their consumption and the method of cost allocation according to it, thus determining only such data as are apparent from the billing without further investigation."
Summary of conclusions from this established decision-making practice:
- If the billing is not factually correct, i.e., proper, the service provider has not fulfilled its obligation to bill the service recipient for the actual amount of costs and advances for individual services, and this obligation therefore continues.
- A condition for the due date of both the underpayment and the overpayment for services is the fact that the billing was performed properly and the tenant was acquainted with it.
Interpretation of the Amendment in the Latest Judgment of the Supreme Court
The Supreme Court provided in its judgment file no. 26 Cdo 2198/2024 of December 11, 2024 perhaps the first interpretation of Amendment No. 424/2022 Coll. The key passages of this judgment read as follows:
"13. The conclusions of the cited case law can still be relied upon, albeit with a certain modification caused by the fact that Act No. 67/2013 Coll. was amended with effect from January 1, 2023 by Act No. 424/2022 Coll., according to which Section 7(3) and Section 8 of this Act read: (...)
14. From the cited wording of Section 7(3) of Act No. 67/2013 Coll., it now follows that defects in the billing statement do not affect the due date of the overpayment, which occurs within the statutory period (no later than 4 months from delivery of the billing statement), and that the due date of the underpayment is not affected by such defects that do not change its amount. These defects can be described as "formal" and the explanatory memorandum includes among them, inter alia, e.g., incorrectly indicated apartment number, (...) [already stated above in this article].
15. The current wording of Section 8(1) and (2) of Act No. 67/2013 Coll. must be interpreted to mean that the service recipient is obliged to raise objections to the method and content of the billing within 30 days of its delivery, or within 30 days of providing the supporting documents for the billing, otherwise it is presumed that they agree with the billing, i.e., a fiction arises that the billing is proper. Even though the explanatory memorandum is silent on this, it can be assumed that the legislator's intention was to prevent disputes about the correctness (properness) of billing from being conducted "endlessly", usually in connection with court proceedings for payment of an underpayment (overpayment) from the billing.
16. Given that Act No. 424/2022 Coll. does not contain any transitional provisions, it can only be concluded that the procedure according to it is followed from the date of its effectiveness of January 1, 2023, which means that it applies to service billing statements prepared after this date, even if they may (as in this case) concern an earlier period."
The Supreme Court thus interestingly interpreted the new legal regulation when, despite the absence of explicit regulation in the explanatory memorandum, it inferred the purpose of the objection procedure, namely to prevent endless disputes about the correctness of billing. Through this interpretation, it found a way to bring the new legal regulation into conformity with its existing case law, which had long proven effective in practice. While previously the courts always examined the properness of billing ex officio, this review is now conditional on the timely assertion of objections by the service recipient, thereby practically achieving the same purpose, but through a more efficient route.
Conclusion
The decision of the Supreme Court brings interpretive rules for the application of Amendment No. 424/2022 Coll. Particularly significant is the confirmation that earlier Supreme Court case law regarding the properness of billing remains applicable, albeit with modifications resulting from the amendment. This ensures the desirable continuity of decision-making practice.
A fundamental change is the new concept of the objection procedure, where in the absence of timely objections, a fiction of proper billing arises. This regulation aims to strengthen legal certainty and procedural economy, while at the same time requiring an active approach from service recipients when checking billing statements.
The court also confirmed that the new rules apply to all billing statements prepared after January 1, 2023, even if they concern an earlier period. This ensures a uniform approach to the application of the new legal regulation. In light of this decision, it can be expected that further case law will focus primarily on the specific assessment of billing defects and their impact on due dates.
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JUDr. Mojmír Ježek, Ph.D.
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