Apportionment failure risk
The risk of loss of apportionment loss is the risk (lump-sum, predictable risk) that rules for renting state-subsidized, price-linked social housing may cause the landlord - primarily due to vacancy - a loss in covering the operating costs for the apartments in question. It is regulated by law in § 25a of the ordinance on determining the permissible rent for price- controlled apartments (in short, new building rent ordinance 1970 or NMV 1970) and defined as the risk of reducing income through
"Uncollectible arrears of operating costs or non- recoverable operating costs as a result of vacancy of space intended for rent, including the unrecoverable costs of legal proceedings for payment."
Unless otherwise covered, the risk of loss of allocation may not exceed 2% of the operating costs incurred on the living space in the accounting period .
The background to this is the obligations that the landlord of state-funded, price-controlled apartments enters into and which include, among other things, that the rent must be kept at a certain level ( cost rent ) and the apartment must be made available for those entitled to purchase. Since he has no right to rent the apartment to those not entitled to move in if it is vacant, this may result in vacancy costs that cannot be passed on to tenants.
