Condominium or house (subletting)
There is a difference between subletting a rented apartment and subletting a condominium or house. Here we will deal with all the rights and obligations you have when you are subletting a condominium or house. By subletting we mean that you sublet your entire apartment or house. If you are only letting a room or a part of the apartment it is instead a live-in tenancy, see Live-in tenancy.
Sometimes it can be difficult to know the difference between live-in tenancy and subletting, especially if the leaseholder lives elsewhere and someone else is living in the apartment but the leaseholder insists that this is a live-in tenancy. In such cases the leaseholder must to prove that they have not in reality relinquished control of the apartment. That one of the apartment’s rooms is locked and thus unavailable to the live-in tenant is usually not enough evidence if the leaseholder is rarely present in the apartment. Letting, in this case, includes leases that are in place without any rent taken out, i.e. free tenures.
About the Swedish Act on Letting of Private Homes (Lagen om uthyrning av privat bostad)
The Swedish Act on Letting of Private Homes entered into force in 2013. The law applies to letting residences (not rented apartments) as long as it is not part of conducting business. A person letting a residence they are not currently using is not viewed as a business activity. A person letting three or more living spaces is viewed as conducting business. If a person is letting more than one residence (but less than three) the law is applicable for the first contract. If another residence is let, the Swedish Tenancy Act applies to the subsequent contract. If three or more residences are let it is seen as conducting business and the Tenancy Act will apply to all the contracts.
The Swedish Act on Letting of Private Homes can be applied to letting condominiums, villas, houses, or owner-occupier apartments and furnished or unfurnished rooms in condominiums, villas, houses, or owner-occupier apartments. Letting or subletting rental apartments is however never covered by the Swedish Act on Letting of Private Homes.
The Swedish Act on Letting of Private Homes regulates fewer things than the Swedish Tenancy Act. The thought is that the Tenancy Act applies to any case not covered by the Act on Letting of Private Homes. A tenant is for example responsible for maintaining the accommodation whether it is a rental apartment or condominium/house. The Tenancy Act also applies regarding when and how the tenant should pay their rent (an aspect not covered by the Act on Letting of Private Homes).
Approval may be required
When subletting a condominium you need to ask permission from your condominium association. How you do this should be outlined in the association’s statutes. Should you be refused to sublet, you retain the right to appeal this decision to Rent and Tenancy Tribunal.
If you are subletting a house you do not need permission.
About the rent
Akademisk kvart have set rent thresholds based on the average student’s financial situation. These thresholds can be found here. In the rent we count on electricity, water and heating being included. It is not allowed to charge extra for furniture.
The Swedish Act on Letting of Private Property is more generous concerning rent than the Swedish Tenancy Act. Therefore, the two parties (you as the landlord and your tenant) are free to come to an agreement on the level of rent yourselves. This rent should however be cost-based (see below how to calculate this), so it cannot be completely unreasonable.
According to Swedish law, it is unreasonable for a leaseholder to profit from subletting their residence. This means that your mortgage should not be included in the rent you charge your tenant. If the agreed upon rent is significantly higher than the accumulated sum of the capital costs and maintenance costs for the residence it is possible for the subtenant to appeal to the Rent and Tenancy Tribunal to evaluate the rent. If the tribunal find that the rent is too high they can decide to lower it. If the Rent and Tenancy Tribunal decide to lower the rent this is valid from the time of the decision, but the tenant cannot demand that the landlord (you) repay the excess.
According to the Rent and Tenancy Tribunal, capital costs are measured as “a reasonable annual yield interest on the residence’s market value”. The cost-based rent cannot be substantially higher than the sum of the landlord’s capital costs and maintenance costs. A recommended reasonable annual yiel interest is a few percentage points higher than the Swedish Central Bank’s interest rate level. This calculation (example below) is not connected to the landlord’s (your) actual mortgage costs. Whether you have purchased the residence with a mortgage or not is irrelevant to the rent you charge your subtenant.
Maintenance costs arse costs such as fees to the condominium association and costs for electricity and internet. In some cases the condominium association has the right to charge a fee upon subletting, which in that case is seen as a maintenance cost. In contrast to the capital costs which is calculated at a flat rate, maintenance costs are connected to the actual costs of the landlord. An add-on of 10-15 percent can be made if the residence is furnished, to cover normal wear and tear of the furniture.
The idea is that the actual costs are covered by the sublet rent, not that the landlord should profit from subletting.
Example of calculation of rent: A condominium worth 3 million SEK is to be sublet. The maintenance costs (e.g. fee to the condominium association, electricity and internet) add up to 1,900 SEK per month. With a reasonable yield interest of 3 percent, the cost of the apartment per month will be:
(3,000,000*0,03)/12 + 1,900 = 7,500. To this we should add the maintenance costs:
7,500 + 1,900 = 9,400 SEK.
If the to parties agree to a rent of 9,000 SEK per month, i.e. a level below the reasonable rent, the landlord (you) does not have the right to appeal to the Rent and Tenancy Tribunal for a raise. If the rent is agreed to be 11,500 SEK, i.e. above the reasonable rent, the subtenant has the right to appeal to the Rent and Tenancy Tribunal to get the rent lowered. Remember not to add your mortgage costs to your tenant’s rent.
For both parties to know what the terms are it is important that there is a written contract – preferably setting out the terms and conditions in as much detail as possible – in a language both can understand.
As a landlord you can ask for a deposit from the tenant as a safety measure, to make sure that the tenant return the keys, take care of the accommodation and cleans it properly before moving out. According to Akademisk kvart’s advertising conditions a deposit is not allowed to be higher than one month’s rent.
It is important that you state clearly in the contract what the deposit regards so that the tenant know what they are obliged to do in order to get the deposit back.
Changing the terms of the contract
Both the tenant and the landlord are allowed to apply to the Rent and Tenancy Tribunal in order to change the terms of the contract. However, it is best for both parties to try to come to an agreement by themselves before starting a legal process. The party that wishes to have the terms tested should ask for a change in writing to their counterparty. If the parties cannot agree, the party that wishes to change the terms can turn to the Rent and Tenancy Tribunal. There is no requirement that a certain time has to pass before you can turn to the Tribunal. This applies regardless of whether you want to change the rent or any other term in the contract.
Termination and duration of the contract
Keep in mind that there are mandatory legal obligations for the benefit of the subtenant. This means that if the tenancy period has been set to a year you cannot break this contract ahead of time if you want to move back home for some reason. However, regardless of the agreed renal period the subtenant can always terminate the contract with three months’ notice. Furthermore, the landlord, but not the subtenant, is according to the law always bound by a three month notice period when you have an open-ended contract or a set rental period of more than three months.
In both cases the time intervals are calculated from the beginning of the month after the day of notice.
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 a one year rental period, the tenant is obligated to move out when this period has passed without a notice of termination from the landlord.
The subtenant never gets tenure when the residence is let in accordance with the Swedish Act on Letting of Private Homes. A waiver regarding tenure is therefore not necessary.
When are you allowed access to the residence?
As the landlord you do not have the right to access the residence without the approval of your tenant. There are, however, instances when you have the right to access the residence:
• For necessary supervision, e.g. if you need to show how the apartment’s appliances work.
• For emergency repairs, e.g. water leaks.
• For non-emergency repairs, but then you need to contact the tenant beforehand.
• For showing the residence to prospective tenants. This is to take place during the notice period, i.e. when the contract has been terminated. The current tenant who at the time of the showing lives in the apartment does not have to be present.
If your tenant is away from the residence for a longer period of time, it is wise to leave a key with someone who can keep an eye on it. It can, but does not have to, be you as the landlord. If it is not you as a landlord it is wise if the tenant lets you know who has the spare key.
Akademisk kvart always recommend that the subtenant get their own home insurance. If the subtenant is an international student, ask them to check what their insurance from their home country covers and whether the more general insurance the student has through the university could act as a home insurance.