• Sweden edition
 
The Lowdown: Sweden's new subletting law

The Lowdown: Sweden's new subletting law

Published: 31 Jan 2013 16:14 GMT+01:00
Updated: 31 Jan 2013 16:14 GMT+01:00

Starting February 1st, 2013, changes to Sweden's laws governing the subletting of apartments and houses go into effect.

The political debate in the run up to the changes has been heated, and since the laws were approved by the Riksdag in December, speculation has been rampant about what the effects of the changes will be. Some claimed rents for sublets could more than double in some areas.

In order to better understand the changes, The Local caught up with Linn Matic, director of housing policy at HSB, one of Sweden's largest cooperative housing associations, with nearly 450,000 member residents across the country.

What are the key changes to Sweden's subletting laws?

One key change concerns the rent that a property owner can charge a subletting tenant. Under the old rules, the rent that could legally be charged was based on the average rent charged for similar rental apartments (hyresrätter) nearby owned by public or private housing companies. Those rents are set centrally through negotiations between rental-property owners and the Swedish Union of Tenants (Hyresgästföreningen).

But starting February 1st, flat owners can charge rents based on the costs of ownership.

What exactly counts as "cost of ownership"?

According to the new rules, 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.

How is market value determined?

If the home was recently purchased, the price paid by the owner can be used as the market value. Alternatively, one can look around at the prices of similar apartments in the neighbourhood and derive market value that way.

What are some more important changes?

The new law also changes how a property owner or the tenant can break the rental contract. Previously, property owners weren't allowed to break the contract, while tenants were required to give three months' notice.

After February 1st, tenants only have to give at least one months' notice if they want to move out of a sublet flat, while property owners who want a tenant to leave must give three months' notice.

SEE ALSO: Photo Gallery - Sweden's 'priciest' house for sale

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.

So, tenants should make sure to check with property owners at least three months before their current lease is due to expire to avoid any misunderstandings.

What are my options if I think my rent is too high?

Now, as before, tenants who think they are paying too much can file a complaint with the Rental Tribunal (Hyresnämnden).

Previously, if the tribunal ruled in the tenant's favour, the landlord had to lower the rent and pay back up to one year's worth of the amount they had been overcharging. So, if a tenant had been paying 10,000 kronor and the tribunal found that the rent should have been 7,000 kronor, the landlord had to lower the rent to 7,000 kronor and pay back 36,000 kronor in surcharges.

SEE ALSO: Find your next home with The Local’s Rentals Section

After February 1st, however, landlords are no longer obliged to repay the overcharged rent, they simply have to reduce the rent to the level stipulated by the tribunal.

Do the changes affect existing rental contracts? And do they apply to both apartments and houses?

The new subletting laws apply to both houses and apartments, but only come into effect for contracts signed on February 1st and beyond. They also only apply to properties which are owned, rather than rental properites.

The subletting of rental properties (hyresrätter) is covered by Sweden's rental law (hyreslagen).

SEE ALSO: Photo gallery - Sweden's 'smallest' apartment in Lund

Thus, anyone currently subletting needn't worry that the conditions of their lease will suddenly change on February 1st. However, they should review their contract and see when it expires so they are prepared for changes that might take place upon renewal.

What other things should property owners interested in renting out their homes bear in mind with the new law?

Probably the most important thing to remember is that people must still get permission from their local housing association (bostadsrättsförening) before they can sublet an apartment. The government originally wanted to get rid of that condition as well, but it didn't end up as part of the final bill.

SEE ALSO: Check out the latest home listings in The Local’s Property Section

There are also some new tax deductions associated with renting out one's home. Previously, property owners could deduct 21,000 kronor from the income earned from subletting, but the new law increases that deduction to 40,000 kronor annually. Any income earned above that amount is taxed at a 30-percent tax rate.

So, the big question: how will these changes affect the rents prospective tenants can expect to pay when subletting an apartment in Sweden?

The effects will vary depending on the current difference between rents charged for rental-only apartments and the market value plus operating costs of apartments in the area. In Stockholm and the other big cities, I think it's safe to say that rents will likely go up because the market values are so high.

It will certainly be easier for property owners in Stockholm to justify charging higher rents.

Will the changes encourage more people to sublet and result in more subletting options, as the government hopes?

I think people overestimate the number of vacant apartments available for rent. In Sweden, most people live in their apartments, whereas it's more common in the United States, for example, for people to own a second investment property they own simply to rent to someone else.

It's also important to remember that the changes to the subletting laws only apply to one property. If someone wants to rent out more properties, those apartments must be sublet according to Sweden's rental law.

If anything, I think the new law may mean that people who plan to move in together may wait before selling one of their apartments and instead decide rent it out.

David Landes

Follow David Landes on Twitter

Don't miss...X
Left Right

Your comments about this article

17:24 February 5, 2013 by henry2
This subletting only put citizens into problems, and abuse. Many will try to make money be using this system, thus asking for rentals too high then any one can afford.Once the signature is placed there will be few regulations to later ask .If any person in in urgent need of a home, he/she will accept any condition, this will give way to abuse. I suggest that contracts will be signed after say a week or more, so tenents has time to look around.
16:35 February 6, 2013 by matressmonkey
This is a great step in the right direction. There is a massive shortage of housing in Stockholm and this will make it attractive for people to rent out their places. The existing system has failed!! That's why there are fifteen year waiting periods!! This new law won't fix everything, but its a beginning.
Today's headlines
Elections 2014
'Sweden Democrats hold the key to elections'
Jimmie Åkesson. Photo: Bertil Ericson/TT

'Sweden Democrats hold the key to elections'

With national elections around the corner, political scientist Stig-Björn Ljunggren says there's a hive of activity behind the scenes, and that the right-wing nationalist party could end up being the key player. READ  

Swedish artist jailed for 'race hate' pictures
Police arrested Dan Park (pictured) and confiscated his art works at an exhibition opening on July 5th. Photo: Drago Prvulovic/TT

Swedish artist jailed for 'race hate' pictures

A Malmö court has sentenced Swedish street artist Dan Park to six months in jail for incitement to racial agitation and defamation. READ  

Sweden Floods
Flooding closes roads in central Sweden
Photo: TT

Flooding closes roads in central Sweden

UPDATED: Sections of the highway in Värmland have been closed off due to flooding, and several trains are standing still. Authorities say the situation will get worse before it gets better. READ  

Elections 2014
Sweden elections: How do they work?
Casting a vote. Photo: Shutterstock

Sweden elections: How do they work?

National, regional, and local elections are taking place in Sweden on September 14th. Whether you're a first-time voter or a fresh armchair observer, The Local's beginners' guide will answer the key questions you were too afraid to ask. READ  

Sweden orders textbook on Roma discrimination
A Romani language class in Malmö. Photo: Drago Prvulovic/TT

Sweden orders textbook on Roma discrimination

The Swedish government has asked a new commission to create school materials based on a white paper documenting Swedish discrimination of Roma. READ  

Day-care rapist
Day-care rape suspect 'was mentally ill'
Photo: TT

Day-care rape suspect 'was mentally ill'

Social services have ruled that a day-care intern charged with molesting 14 children in southern Sweden was "seriously mentally disturbed". READ  

What's On in Sweden

What's On in Sweden

Autumn has arrived in Sweden, which means grey skies are approaching. But summer goes out with a skip, hop, and a bang - the annual Color Run is taking place in Stockholm this weekend. READ  

Surströmmingspremiär
Swedes celebrate first day of smelly fish season
Photo: Hasse Holmberg/TT

Swedes celebrate first day of smelly fish season

On the third Thursday of each August, Swedes celebrate the start of the fermented herring season. The Local finds out more about the worst-smelling food on earth, and collects some of the best reaction videos. READ  

Spotify founders win 'Expats of the Year'
Crown Princess Victoria and Spotify co-founder Martin Lorentzon Photo: Fredrik Sandberg/TT

Spotify founders win 'Expats of the Year'

Spotify founders Martin Lorentzon and Daniel Ek won the International Swede of the Year award (Årets svensk i världen) on Wednesday for their work in making the world's music accessible to the world. READ  

Top ministers count cost of 'less secure world'
Photo: Maja Suslin/TT

Top ministers count cost of 'less secure world'

Foreign and Finance Ministers Carl Bildt and Anders Borg held a press conference on Wednesday to discuss how Sweden was being affected by a "less secure" world, and how it would foot the bill for a growing influx of refugees. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Finest.se
Gallery
People-watching August 20th
Society
Did you know the Bronx in NYC was named after a Swede?
Politics
"Iraq reminds me of the Yugoslav wars. It's the same story."
Society
Swedes slam Danes for 'racist' art
National
Majority of Swedes favour more or just as many refugees
Blog updates

17 August

Sea Fever (Around Sweden in a kayak) »

"I’m going to keep this post short and sweet as its not something I take any pleasure in writing. After much deliberation I have made the heartbreaking decision to abandon my trip after 1200km due to reoccurring injury. It is not a decision I have made lightly and it is one that has been truly devastating..." READ »

 

17 August

St. Louis strong (Blogweiser) »

"It’s typically a bad sign when my hometown makes news in Sweden. St. Louis was in the headlines here a few years ago when a tornado struck the airport. The city also caught attention after a politician talked about ‘legitimate rape’. Now, shooting and riots this week in Ferguson, a part of St. Louis, are..." READ »

 
 
 
Society
Lock your bathrooms: Swedish toilet invader on the the loose
Politics
'Assange will not leave until safe'
Gallery
See more images from the southern Sweden floods
Sponsored Article
Find out what gives this Swedish school executive appeal
Society
Serial chicken smuggler caught at Norway border. Again.
Society
This gold coin may be the key to solving a Swedish massacre
Shutterstock
Lifestyle
The Swedish mentor (and why you may need one)
National
Food agency warns girls: 'Don't eat stinky fish'
Politics
Reinfeldt calls for tolerance to refugees
Gallery
People-watching August 16-17
National
Sweden celebrates 200 years of peace
Society
Top ten literal Swedish words
Politics
'Terror training should be illegal': Liberal Party
Gallery
Swedes talk about 200 years of national peace
Politics
Islamic extremist shakes Sweden with TV threat
National
Teacher fined for 'Hitler salute' in German class
National
Swede asks for epidural and gets disinfectant
Features
Kiruna residents talk life in a town on the move
National
Swedish dad takes kids to Israel to learn about war
Skatteverket
Sponsored Article
Introducing... ID cards and permits in Stockholm
Sponsored Article
Introducing...Your finances in Stockholm
Sponsored Article
Introducing...Housing in Stockholm
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Germany

More news from Germany at thelocal.de

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

697
jobs available
Swedish Down Town Consulting & Productions
Swedish Down Town Consulting & Productions is an innovative business company which provides valuable assistance with the Swedish Authorities, Swedish language practice and general communications. Call 073-100 47 81 or visit:
www.swedishdowntown.com
PSD Media
PSD Media is marketing company that offers innovative solutions for online retailers. We provide modern solutions that help increase traffic and raise conversion. Visit our site at:
http://psdmedia.se