When signing a lease, it is common to encounter two types of charge arrangements: fixed charges and provisions for charges. At Colonies, we use both models – check your lease. But what are the differences? Here's a guide:
💰 Fixed charges: what is it?
Fixed charges are a set amount, determined at the start of the rental agreement, covering part or all of the costs and services related to your accommodation (water, heating, internet, various services, etc.).
🔑 Characteristics of fixed charges
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Fixed amount: The amount does not change throughout the contract's duration. No matter your consumption, the amount remains the same.
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Simplicity: No complex calculations to make at the end of the month, which can be tricky in a shared accommodation model. It’s a clear, easy-to-manage amount.
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💰 Provisions for charges: what Is It?
Provisions for charges are advance payments made monthly to cover part or all of the charges. These are then adjusted at the end of your lease according to actual consumption. If you've paid more than you consumed, you will be refunded. If you've consumed more than expected, you will pay the difference.
🔑 Characteristics of Provisions for Charges
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Variable amount: The amounts are based on estimates but can be adjusted according to actual consumption.
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Reconciliation: At the end of your lease, an assessment is done to adjust the amount based on your actual consumption if it's excessive.
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🌱 Charges : the ESG impact
Provisions for charges promote responsible resource consumption (water, energy). At Colonies, we encourage eco-friendly practices for a more sustainable future and reduced carbon footprints for the properties. This is why we pay special attention to overconsumption and prevent misuse.
📊 Practical example
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Fixed Charges: You pay €100 per month for charges. No matter your water or heating consumption, you always pay this amount.
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Provisions for Charges: You pay €100 per month, but upon your departure, a check is done, and you are refunded if you've overpaid, or you will need to pay extra if you've consumed more than expected.
The terms of the charge payments are explicitly outlined in your lease, under the sections concerning rent and charges.