Billing as compliance risk: what Germany's experience means for European property owners

Property owners managing multi-tenant buildings in Germany face an uncomfortable reality: tenants can legally refuse to pay energy bills when billing data cannot be proven reliable. The financial consequences are significant, with some buildings losing substantial revenue annually in uncollectable charges.

"We've encountered situations where property owners are losing between one hundred thousand to several hundred thousand euros per year in charges they simply cannot collect," explains Kees van Alphen, Managing Director at Hello Energy. "The moment a tenant questions the reliability of the billing data, and the landlord cannot prove which meter measures which space, the tenant can legally refuse payment."

While this is specifically a German regulatory challenge today, it offers valuable insights for European property owners. As tenant sophistication grows and energy costs remain high, billing transparency is becoming a business priority across markets—whether legally mandated or not.

The German precedent: when data reliability becomes enforceable

Germany's Heizkostenverordnung, amended in 2021, turned billing accuracy from operational practice into legal requirement. The regulation mandates:

• MID-certified meters that meet European measurement standards

• Remote-readable devices (new installations since December 2021, all systems by end 2026)

• Monthly consumption information provided to tenants

• Clear documentation linking meters to tenant spaces

Let's be honest—the 3% cost reduction tenants can claim per violation sounds manageable. The real challenge runs deeper: proving your billing allocation is accurate.

"The bigger issue is when you fundamentally cannot prove your billing allocation," Van Alphen explains. "We see this often in older properties that have been extended, where tenants have been relocated, where walls have been moved. Nobody knows anymore which meter measures which space precisely."

When metering infrastructure can't support billing

These scenarios aren't edge cases:

• Warehouses extended to accommodate different-sized units

• Office buildings where spaces were combined or subdivided

• Mixed-use properties with converted retail spaces

• Buildings with 20-30 year old metering infrastructure

"You can imagine if you have a square metre where you only have storage, or a square metre where a cooling installation stands—those square metres mean nothing," Van Alphen says. "The installations determine consumption. You must measure it directly, otherwise it's simply unreliable."

Why data quality is central to compliance

MID certification isn't merely administrative—it's about data reliability. Older meters often provide readings once a month, sometimes through manual collection. Modern remote-readable meters deliver consumption data continuously, typically at 15-minute intervals.

This granularity matters for two reasons. First, it provides the documentation necessary to substantiate billing. Second, it enables property owners to verify that their metering infrastructure actually covers consumption accurately. When master meter readings don't align with submeter totals, you have a data gap that signals measurement problems.

The infrastructure challenge: addressing decades of decisions

Here's where complexity escalates. This isn't about purchasing new meters—it's about addressing infrastructure that wasn't designed for individual tenant metering.

"We encounter buildings where metering infrastructure is 20, 30 years old and doesn't reflect the current situation at all," Van Alphen explains. "Installations have been added. Tenants have moved. Spaces have been reconfigured. But the metering infrastructure hasn't kept pace."

The challenge varies by energy type. Electricity is relatively straightforward to submeter. Gas requires rerouting pipelines—an expensive undertaking. Heat systems are the most complex, requiring expensive insulated pipes.

"For electricity, placing submeters is quite manageable," Van Alphen notes. "But with gas you simply have to reroute gas lines. For heat systems it's sometimes even more expensive, because those pipes are very expensive and must be insulated."

Solutions exist, but execution is difficult. Many of Germany's largest construction companies consider this work too specialised. Timeline? Often six months before contractors can begin.

The technical work starts with assessment: understanding your current state versus required state. "You need the infrastructure in order, and you need to be able to read out the meters and monitor them in the platform," Van Alphen explains. "Those are all different functions that a company doesn't have in-house."

The business case: data quality enables revenue collection

Property owners face substantial annual revenue losses when billing cannot be substantiated. The infrastructure investment varies significantly based on building complexity, but the ROI calculation remains straightforward.

"If you say: well, I want to earn it back in one, two or three years, then we're talking about many hundreds of thousands that are available to solve the problem," Van Alphen notes. "So it's a lot of budget."

The choice is clear: infrastructure investment with ongoing revenue recovery, or continuing revenue losses from uncollectable charges.

"The motivation is mainly financial," Van Alphen observes. "You have a legal obligation to measure your consumption. But our clients look at this really as a business case. In Germany, enforcement isn't the point—the money is the point."

Beyond Germany: why this matters for your portfolio

Germany's tenant rights are unique. But the technical challenges aren't.

"In the Netherlands, the energy bill is often based on square meters," Van Alphen acknowledges. "But as soon as an office is added somewhere or a machine is added and it's not measured, you already have a system that isn't covering everything."

Property owners across Europe face similar realities: buildings are reconfigured without updating metering infrastructure, energy balance gaps emerge between master meters and submeters, tenants grow more sophisticated about energy costs, and documentation doesn't match actual consumption.

"Buildings, certainly those large distribution centres, are often reconfigured," Van Alphen notes. "So those meters are at a certain point no longer correct."

"We expect that this will become a larger problem," Van Alphen says. "With the rising energy price we just see that awareness of the costs of energy has increased enormously."

What's next: the trajectory of billing transparency

The direction is clear: tenant sophistication continues rising, energy costs remain significant operating expenses, and ESG reporting demands verified consumption data. Property owners who invest in data quality and metering infrastructure gain advantages beyond compliance—capabilities that matter whether regulations mandate them or not.

Taking billing compliance seriously

Energy billing accuracy has evolved from operational detail to business priority. Germany's experience demonstrates what happens when data reliability becomes legally enforceable—but the underlying challenge exists wherever property owners must prove their billing allocation.

The combination of rising energy costs, growing sustainability focus, and increasing tenant awareness is creating pressure for billing transparency across Europe. For property owners in Germany, addressing billing compliance risk is essential. But even in markets without specific regulations, the business case for billing accuracy is compelling.

The complexity shouldn't be a deterrent—it's precisely why proactive property owners gain competitive advantage. Those who address metering infrastructure and data quality today position their portfolios for a future where billing transparency is simply expected.

The choice is yours: build this capability now, or wait until market pressure or regulation forces reactive action. Either way, billing transparency is coming. The question is whether you'll be ready.

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