Unit Owners' Association

Remote Meter Readings: An Obligation That Cannot Wait

Act No. 406/2000 Coll., on Energy Management, in conjunction with Act No. 67/2013 Coll., sets a clear deadline. By 31 December 2026, all specified heat meters and indicators that are not yet remotely readable must be replaced or upgraded.

From 1 January 2027, it will no longer be legally permissible to operate meters in apartment buildings with a central source of heat or hot water that require physical entry into the apartment for a reading.

Remote reading is defined as a system that allows measured values to be read without needing access to individual apartments or non-residential premises, typically from a distance of more than 250 meters. For new installations, walk-by systems may no longer be sufficient to meet the frequent information obligation.

Practical Risks and Fines

Failure to comply with this obligation constitutes an administrative offence. The State Energy Inspectorate (SEI) monitors compliance with the Energy Management Act. A fine in the range of tens to hundreds of thousands of Czech crowns can be imposed for failing to install the specified meters or equip them with a remote reading function.

Many HOAs are not yet aware that exemptions from this obligation are very limited and apply only in cases of technical infeasibility or economic inefficiency. If an HOA fails to provide objective reasons for not carrying out the replacement, it faces a penalty.

How to Prepare: Practical Steps

HOAs should immediately review their contracts with billing service providers and the condition of their meters. In practice, it is also useful to have specific guidance on modifications in apartment buildings, for example, in the article apartment alterations without a permit: what can be done without notification/permit and when a project is needed. If the meters are not remotely readable and their service life ends after 2027, they must still be replaced or fitted with a radio module by the end of 2026.

It is important to remember that the cost of purchasing the meters is usually borne by the unit owner, but the HOA is responsible for organising the replacement. The lawyers at ARROWS law firm can help you review your bylaws and work contracts with metering technology suppliers to clarify who bears the costs and responsibility.

New Obligations to Inform Owners about Energy Consumption

The obligation to inform owners about their heat and hot water consumption at least once a month has been established in the Czech legal framework for some time. Since all meters must have remote reading capabilities from 1 January 2027, this obligation will become universal for all affected HOAs from that date.

Information on consumption does not have to be sent by registered mail. As portals and applications are often used and data on apartment usage is processed, it is advisable to also consider the requirements of GDPR. In practice and according to the law, making the data available via remote access, for example through a web portal or an application, is sufficient, provided the owner is informed of this.

What Constitutes Correct Information

According to Decree No. 269/2015 Coll. and the Act on Services, the information must include data on the recorded consumption of heat and hot water for the given period. The goal is to enable the apartment user to regulate their behaviour and save energy.

A common mistake is to assume this is a monthly bill or invoice. It is not a financial settlement of costs, but rather information on consumption in measurement units. If an HOA fails to provide this information, it is in breach of Act No. 67/2013 Coll.

Practical Risk: Disputes and Penalties

If an HOA fails to meet its information obligation, it faces the risk of a fine. According to the Act on Services, an obligation may arise to pay the service recipient a penalty for delay in non-monetary performance, although for monthly information, the primary issue is public-law supervision by the SEI.

However, a greater risk lies in disputes over the validity of the total annual billing. When a dispute escalates to court proceedings (e.g., over arrears or the invalidity of the billing), it can be useful to know the context of liability for interventions in the building, see changing the layout of an apartment in a residential building: intervention in common areas, statics, and liability.

If an owner objects that they did not receive regular information and could not influence their consumption, this can complicate the recovery of arrears. In practice, a timely legal analysis and setting up a procedure for recovering arrears, or resolving the dispute in court as part of commercial and court disputes, can often help.

Energy Performance of Buildings Directive: Reality vs. Myths

In 2024, a revision of the European Energy Performance of Buildings Directive (EPBD) was adopted. Although the original proposals spoke of a strict ban on the use or sale of buildings in classes F and G by certain dates, the final version is more lenient.

Member States, including the Czech Republic, must ensure a gradual reduction in the average energy consumption of the housing stock. This means that the obligation to renovate is transferred to the state level, which must establish subsidy and legislative conditions to encourage renovations.

What Does This Mean for HOAs in Classes F and G?

Although there is no direct legal mandate to renovate under threat of a fine, buildings in energy classes F and G will find themselves under strong economic and market pressure:

• Decrease in property value: Apartments in energy-inefficient buildings are losing market value.

• Targeted subsidies and state pressure: The state will prioritise directing subsidy programmes towards the worst-performing buildings.

For HOAs, this means that postponing insulation or the replacement of heat sources is becoming a strategic mistake. Banks may be more cautious when providing mortgages for such properties as part of so-called green financing.

Practical Risk: Inaction by the Statutory Body

The HOA committee has a duty to act with due managerial care. Ignoring a building's critical energy condition, which leads to the depreciation of the owners' property or unnecessarily high energy costs, can establish the liability of committee members for damages.

The lawyers at ARROWS law firm can assist you with the legal preparation of investment projects, including reviewing loan agreements and contracts with contractors, to ensure the investment is legally secure.

Heating System Inspections

The obligation to conduct regular inspections of heating systems and combined heating and ventilation systems still applies if their rated output exceeds 70 kW. This obligation affects most larger apartment buildings with their own boiler room or transfer station.

The inspection interval depends on the source type and output, typically ranging from 2 to 5 years. The inspection is carried out by an energy specialist authorised by the Ministry of Industry and Trade (MPO), and the inspection report must be submitted to the State Energy Inspectorate upon request.

Risks of Neglect

The absence of a valid heating system inspection report is an offence under the Energy Management Act. In addition to a fine, the HOA also faces the risk that in the event of an insured loss, the insurance company may reduce the payout if it discovers that the statutory inspection under Decree No. 38/2022 Coll. was not performed.

New Accounting Act: What to Expect

A new Accounting Act is in the legislative process, expected to take effect probably from 1 January 2028. For HOAs, it should bring a categorisation of accounting units, an emphasis on the electronisation of records, and changes in reporting.

HOAs will likely fall into the category of micro or small accounting units. The new act aligns more closely with international standards, which may change the accounting methodology for some operations and the structure of financial statements.

Unlike business corporations, an HOA does not account for the value of the apartment building, but only for its own assets and the administration of third-party property.

The lawyers and collaborating tax advisors at ARROWS law firm are monitoring legislative developments and are ready to help HOAs transition to the new rules.

Final Summary

The year 2027 and the period leading up to it require action from HOA committees. Waiting until the last minute can be costly, whether due to penalties for missing remote readings or rising prices of construction work and materials.

HOA chairpersons, who often perform their duties in their free time, cannot grasp all the nuances of the Energy Management Act, the Civil Code, and accounting regulations.

The lawyers at ARROWS law firm specialise in housing law and property management. We can take on the burden of legal responsibility, review your internal regulations, and ensure that your HOA navigates this period of change without fines and disputes.

If you want to be sure that your HOA is operating in compliance with the law, contact ARROWS law firm today.

Contact us at consultation@arws.cz to arrange a consultation.