Can they stop me renting out my flat?

I own an apartment in Stockholm, which I have been renting out since the beginning of the year, when I moved back to the UK. Now, the board of my apartment building (the bostadsrättsförening), says they will no longer permit me to rent it out from January. Do they have the right to stop me renting out my own apartment? Matt, London.

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With a seemingly permanent shortage of rental apartments in Sweden’s large cities, apartment owners can find a ready market if they want to rent out their properties. But they might also find themselves on the wrong side of their housing association – and on the wrong side of the law.

Matt’s problem is rooted in the fact that there is no legal ‘buy-to-let’ market in Swedish apartments. Private landlords exist, but they usually own whole buildings rather than individual apartments.

The crux of the issue is that Matt doesn’t technically own his apartment. He owns a ‘bostadsrätt’ – effectively a share in the housing association (bostadsrättsförening) that owns the building. His ownership of that share is connected to the right to live in that apartment, but the housing association’s board retains a lot of power over what he can do with it.

Living in a bostadsrätt only gives you the same right to rent out your apartment as you would have if you yourself were renting. The law sees both forms of renting as a form of subletting or ‘andrahandsuthyrning’.

So, if you are going to rent out your bostadsrätt, the first thing you must do is ask the board. The board should approve your request if you are temporarily living elsewhere because you are working or studying abroad or in another part of Sweden, you are carrying out military service or you are living with your partner for a trial period.

If the board does not grant you permission, you may appeal to a regional rent tribunal (hyresnämnden). These tribunals are courts and their decisions have force of law. If Matt intends to come back to Sweden in the medium-term he should, on the face of it, have a good case for getting the decision of his housing association overturned.

Ulric Hoij, legal advisor at the Swedish Property Federation (Fastighetsägarna), which represents the interests of property owners, says that rent tribunals will usually find in favour of people who want to rent their apartments out “for a couple of years.”

If Matt has moved back to the UK for good, he will have a hard time getting the tribunal to decide in his favour. If the tribunal finds against him and he fails to come to a deal with the housing association, the association could ultimately force a sale of his apartment.

But why are Swedish housing associations so reluctant to allow apartment owners to rent their flats out? Ulric Hoij says it is usually out of a belief that tenants will be less willing to participate in the running of the building:

“It can make it hard to get enough board members or to get people along to the spring and autumn cleaning days. This makes renting a particularly sensitive topic in buildings with few apartments.”

There are other things worth thinking about before you rent out your apartment: for instance, it is your responsibility to ensure that you find a responsible tenant. If your tenant causes disturbances, the housing association could hold you responsible. It also remains your responsibility to pay your service charge and discharge other duties to the housing association.

You should also remember that you are obliged to charge a rent that is in line with rents locally. Rent tribunals may order landlords to refund rents that are substantially higher than those charged for council-owned apartments in the same area.

Renting out your apartment could become easier in the medium term. The Swedish government plans to allow owner-occupied apartments ('ägarlägenheter'). Under proposals under consideration, people will have a greater number of rights over how they dispose of their apartments, and will be able to decide for themselves whether to rent them out. Initially, only new-build apartments will be owner-occupied. In the long-run, however, many observers expect that it will also be made possible to convert older apartments to owner-occupied status.

Do you have a question about the practicalities of living in Sweden? Then drop us a line at news@thelocal.se.