On February 1, 2013 the rental law changed. The impact is yet to be seen but many speculate that the changes will bring more rentals to a market that has historically been very limited.
The law is two-folded and confusing at first glance as one section of the law is applied to rentals (you rent directly from the owners) and another part of the law is applied to co-ops and condos (sublets). The new rental law changes two things: notification periods for sublets as well as setting of the rent level of sublets. The old rules apply to rentals, nothing has changed for this category.
New rules for setting the rent level of a sublet:
For owned property (bostadsrätter, ägarrätter and houses) rent charges can cover operating costs and capital costs. Operating costs can include monthly fees paid to the cooperative housing association (bostadsrättsförening), utilities, as well as a premium for wear and tear. While the law doesn't mention mortgages specifically, property owners are allowed to charge for the "cost of capital", which is at this time considered to be around 4 percent of the market value of the home. This applies to the owner's first property that they sublet, any additional properties are categorized as a rental since the landlord now is defined as a "professional landlord". Hence, additional properties fall under the old law.
If the property is a "hyresrätt", the owner is allowed to charge you their own rent to the owner of the house + 10-15% if the property is furnished.
New rules regarding giving notification:
For privately owned properties, the tenant may give 1 calender month notice and the landlord 3 calender months notice regardless of agreed upon lease term. Also, tenants can't assume that rental contracts are extended automatically and must move out at the end of the contract even if they haven't received any formal notice from the landlord.
For "hyresrätter" the old law applies: Lease agreements that have a fixed period only or with continuation bind the landlord to the initial period. A tenant always has the right to give notice three months from the last day of the month the notice was served. This right applies irrespective of other terms of the contract and cannot be changed. This is Swedish rental law and cannot be circumvented.
The landlord can always relinquish their right of the notice period and thus can allow the tenant to be released from the agreement prior to the end of the notice period. The agreement can state a longer notice period, but then it only applies to the landlord, also, if the agreement states a shorter notice period it only applies to the tenant. Three calender months notice must always be given by both parties.
Since the law is two-folded and different for rentals and sublets it presents a problem for relocation companies and some letting agents that offer tenancy management. The companies offering tenancy management (i.e they rent a condo from the owner and then sublet it to the corporate client) has a severe problem under the new law since notification periods are different for the two different categories of properties. This will indeed have effect on the market and mobility to and from Sweden. Many companies may not be able to outsource tenancy management as a result and some letting agents will have to revise their business models. Fortunately, Residensportalen has never believed in the tenancy management model since we feel that it is not a good practice to be both a landlord and a tenant on the same property. This decision was made in 2003 and unbeknownst to us, it was the right way to go. We will continue to update our readers on the new rental law of 2013 and how we see the market effects as they unfold.
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