In this chapter we will discuss the rights and obligations for you who own a condominium or a house. Normally, these two categories abide to the same law (Lagen om uthyrning av privat bostad), but sometimes not. We will clarify this below. What you need to know right away is that having a rental contract for an apartment, is not the same as having an apartment in a condominium association, if you do, look under Tenancy.
About Lagen om uthyrning av privat bostad
A new law was introduced in 2013, Lagen om uthyrning av privat bostad (the law on leasing of owned residence). The Swedish Justice Department describes the law like this:
This law applies for leasing an apartment as a living space under condition that this is not a part of a business. A person renting out a living space he/she is not currently using is not viewed as a business. A person renting out three or more living spaces is viewed as conducting business. If a person is renting out more than one living space then this law is applicable only for the first lease. For the rest of them the Swedish rental law applies (Hyreslagen: 12th chapter in Jordabalken). The living spaces leased under this law can be e.g. condominiums, villas, furnished or unfurnished rooms, or owned apartments.
A lease of a rental apartment is however not covered by this law.
Lagen om uthyrning av privat bostad has few regulations in comparison to the rental law. The assumption is that Hyreslagen (the rental law) applies to all cases not covered by Lagen om uthyrning av privat bostad (the law on leasing of owned residence). A tenant is for example responsible for maintaining the residence even if that residence is owned and not rented (ref. 24§ hyreslagen). The same applies if the tenant does not hold up his/her responsibilities (ref. 42 § hyreslagen). Hyreslagen also apply when it comes to paying rent (ref. 20 och 21 §§ hyreslagen).
Approval may be required
When renting out a condominium you don’t need to ask permission from your landlord (since you do not have one) however you need to ask permission from your condominium association. How you go about asking for permission for this should be outlined in the association’s statutes. Should you be refused to sublet, you retain the right to appeal this decision to Hyresnämnden (rental tribunal) the same way you would if you were renting a rental apartment.
If you are renting out a house or a villa then you do not need to apply for permission at all.
About the rent
A new law was introduced in 2013 differentiating rent prices between rental apartments and condominiums/houses (Lagen om uthyrning av privat bostad). This law is more generous in the aspect of deciding the level of rent if you compare it to Hyreslagen which applies for subletting of rental apartments. Therefore, the two parts (you and your tenant) are free to come to an agreement on the size of the rent. This rent should however be a cost-based rent (see below how to calculate it), so even though you are freer to decide the rent, it cannot be completely unreasonable.
According to Swedish law, it is unreasonable for a first-hand contract holder to profit from renting out his/her apartment second-hand which means that your mortgage should not be paid by the tenant. If the agreed upon rent is significantly higher than the accumulated costs for capital and maintenance costs for the living space, then it is possible for the second-hand tenant to appeal to Hyresnämnden (rental tribunal) to adjust the rent size. The landlord does not maintain the right to raise the rent size through Hyresnämnden. Also, if Hyresnämnden decide to lower the rent, you do not need to pay back the excess rent from previous payments to your tenant.
Capital costs are measured through a reasonable return interest on the living space’s market value. If the living space was recently purchased then you should have a good idea of the market value. A suggested value for the return interest is about 2 % above the interest level of Riksbanken (the Swedish Central Bank). This calculation is not connected to the landlord’s actual loan costs. Whether or not the acquired living space is purchased through a loan or not is therefore irrelevant to the rent levels. Maintenance costs are costs of maintaining the living space in the condition it is when leased. Such expenses can be e.g. fees to the condominium association, electricity bills, internet costs, wear and tear of furniture etc. It is the actual costs that are to be covered – the idea is not that the landlord should gain an income.
Example of calculation of rent: A condominium apartment, worth 3 million kronor is rented out second hand.
The fee to the condominium association and other maintenance costs add up to 1900 kronor per month. With a reasonable return interest of 3 %, the cost of the apartment per month will be:
(3 000 000*0,03)/12 + 1 900 = 9 400 kr
If the rent is agreed to be 9000 SEK per month, the landlord has no right to appeal for a raise of the amount at the tribunal. If the rent is agreed upon at 11 500 SEK, then the second hand tenant can appeal for a reduced rent at Hyresnämnden (rental tribunal) The tribunal will then in this example decide to lower the rent if the amount significantly exceeds 9 400 kr.
For a fully furnished apartment it is possible to add a 10-15 % increase on the monthly rent. Should the rent exceed these limits it is possible for the second-hand tenant to apply to Hyresnämnden for a judgement. Remember to not include the cost of your own loans in the rent of the tenant.
Write a contract
It is important that you sign a written contract with your second hand tenant. You can find contract templates at our webpage. Keep in mind that there are legal regulations that over cede contract law in favor of the second-hand tenant.
It is common for landlords to ask for a deposit from the tenant as a safety measure. Normally this deposit is to make sure keys are returned, the state of the room and cleaning is done before the tenant moves out. It is important that you clearly state in the contract what the deposit regards so that the tenant knows what he/she has to fulfill in order to get the deposit back. Normally the deposit consists of one or two months’ rent.
Changing the terms of the contract
Both the tenant and the landlord are entitled to apply for changed conditions at Hyresnämnden (rental tribunal). However it is best for both parts to try to come to an agreement by themselves first before starting a legal process. When the opposite part is informed of the desire to change the contract conditions, an application may be send to Hyresnämnden (rental tribunal). This applies to both a desired change in rent and a desired change to other contract conditions.
Termination and duration of the contract
The landlord may need to use the living space. For that reason the landlord has the right to give three months’ notice of termination. For a second-hand tenant living conditions can change quickly. For that reason the tenant has the right to give one month’s notice of termination. In both cases the time intervals are calculated from the beginning of the month after the day of notice.
Example: If the tenant gives notice of termination on the 12th of August, then the contract seizes to apply on the 30th of September. If instead the landlord gives notice of termination on the 12th of August then the contract seizes to apply on the 30th of November.
The tenant has no right to prolong the contract against the landlord’s wishes. This applies regardless of the length of time the contract has lasted.
If the landlord gives notice of termination, the tenant is obligated to move out once the notice of termination is over. If a contract is signed for one year of housing then the tenant is obligated to move out when this period has passed without a notice of termination from the landlord.
When do you have to allow your landlord access to your apartment?
You as a landlord don’t have the right to enter your apartment without the approval of your tenant.
There are, however, instances when you have the right to enter the apartment:
• For necessary supervision.
• For emergency repairs, for example of a leaking water pipe.
• For non-emergency repairs. In these cases however you are obligated to contact your tenant in advance.
• For viewing by potential tenants in case the apartment is about to become available. You, however, do not have to be there for this.
• When the tenant is away from the apartment for a longer period of time, it is wise to leave a key with someone who can keep an eye out for the apartment, e.g. you as the landlord. The tenant can however also choose to give the key to someone else.
We always recommend that the tenant gets his or her own home insurance. If the tenant is an international student, ask him or her to check what his/her insurance from home covers and also what the general insurance from the university covers.