(edit title) New rental law removing price caps What does it include and to whom does it apply? Options

[elk200]

Has anyone heard about this? http://www.di.se/artiklar/2012/11/13/gront...attning/?print=

My Swedish only goes so far... But the general gist I'm getting is that this will apply to people who rent out flats that they own themselves?

How will it possibly apply to 2nd hand tenants renting from 1st hand tenants? And will it be possible to claim back overcharged rent from periods before the law was effective, if the law goes into effect? Not all of this seems to be part of that article, but if anyone with better Swedish wants to share some links and insight here - everyone would appreciate it, I guess!

[Bender B Rodriquez]

It does not affect the subletting of rental apartments, only BRF.

As it is now, the owner of a BRF cannot charge the actual cost when subletting, instead the price is decided by equal rental apartments. In the new proposal, BRF owners will be granted the right to charge rent corresponding to the monthly fee + interest/mortgage payments, i.e. what they pay themselves.

Anyway, it is still just a proposal and it has to pass through parliament.

[elk200]

Okay, if I understand correctly:

- A person who owns a flat and rents it out would no longer be bound to any "comparable" rental caps.
- This does not affect companies renting out to private persons, i.e. the companies would still be bound.
- And also, first-hand tenants that rent out to second-hand tenants would still be bound by rental caps.

Or anything misunderstood?

[Bender B Rodriquez]

Yes, that's pretty much it.

[Yorkshireman]

In addition to the removal of rental caps, they want to remove the right to have the reasonable rent test so it will not be possible to reclaim back rent currently viewed as overpaid retrospectively. Also, though will be tough to get through, removal of the current need for permission from the BRF Board to rent out 2nd-hand.

In simple terms, the rent you sign a contract for would be the rent that applies.

And as Hyresgästföreningen have reported, their study shows that rents in central Stockholm for 2nd-hand BRFs would on average +100%, outer Stockholm +50%, Central Göteborg +50% ...Malmö wouldn't change that much < +10%!

[byke]

In reality, if this goes through it will lead to a lot less work in regards to claims of rent rebate / over charging reviews.

But how wouldm 2nd hand tenants be able to ensure fair rents based on 1st hand overhead cost claims? For example, we don't have a mortgage. Thus of we were to rent out we could only charge a very nominal fee. Infact it would be considered too low by today's standards.

But if a 2nd hand fee is proposed that is higher than the base fee paid since we have no mortgage, how would a tenant seek a review or proof of actual owners overheads?

Could this open up a market for second hand contracts where any profit made would be only by those who own the property outright?

[Yorkshireman]

There is a magic calculation in the proposal with regards the 2nd-hand rent. which is initially calculated as (4% of market value of the apartment + the fees the BR owner has) ...who decides what market value is is anybodies guess.

What this means is, if You have no mortgage, you can still include 4% of the market value in the rent. ie. as though you had a mortgage.

In addition to that, with regards the 2nd-hand rent asked ... för inte prövas. (cannot be challenged)

Put simply, what is in the contract, you either agree to pay or don't take the apartment.

According to some sources ...this is step 1, there will come a later proposal with regards rental apartments. There are many older buildings where rents are kept low due to the current rent rules, once the market for BRF 2nd-hand renting establishes higher market rates, it is very likely that the rest of the market will be let loose, allowing landlords to charge market rents even on older properties.

[wondering]

There have been a lot of threads recently on the local where we have discussed on the Economic crisis and the fact that perhaps there is a very big bubble in the housing market in Sweden.

But with rules like this I can't see the prices falling in the near future .

I think now youngsters will really try hard and get on the property ladder, which in turn will raise prices and so on.

But strangely also new apartments in Haninge remain unsold .

http://epaper.mitti.se/edoris?tem=epaper_miha#

[Bender B Rodriquez]

That's because newly produced apartments have huge loans = high association fees. Buyers prefer old, stable associations with few loans left.

[sometimesinsweden]

Too true, bru

Over the water in Hisingen, some of those one-bedder new builds looking over Gota going for 1.7 mill, which seems reasonable, until you see the 7500kr a month on top BRF fee.

Stinker

[byke]

A few years ago before the big sink, many people were buying new builds with both high prices and silly monthly charges as part of times that both reflect prosperity and status.

I was strongly advised at the time by friends and estate agents to invest in a new build in Stockholm, but I strongly resisted as I was adamant that I wanted to live in an area that was slap bang in the center of town (where there were no new builds) and trusted an old established small house BRF more than speculation on interest rates.

Now life is about swings and roundabouts .... and at present I am glad I dont have a high BRF fee for our humble pad. But had I signed up to the "standard" at the time, where new = status and live and enjoy, I am sure I would be struggling right now.

I cant see who would be silly enough to pay top kronks right now for a new build and a BRF with no kitty. But give a man enough rope and there will always be one or 2 out there.

[elk200]

In addition to the removal of rental caps, they want to remove the right to have the reasonable rent test so it will not be possible to reclaim back rent currently viewed as overpaid retrospectively.

Again, this only applies to BRF, correct? 2nd hand tenants that rented from 1st hand tenants would still be able to claim back afterwards? (Also, where did you get that, so I can read it myself, too?)

[byke]

I dont think so (Or should I say I dont think that is the plan)
Basically if you agree to a price as a second hand tenant, then you are bound by that decision.

[Bender B Rodriquez]

Nope, the current proposal only applies to privately owned apartments.