(edit title) What is the penalty for illegal renting 'owners'? Fedup of super high rentals and unstable agreement Options

[grymagnusson]

This is quite useful where You have desperate need of an apartment for a temporary period say a few months to 1 year, you can accept the high rent in the contract, and once th ... (show full quote)

This is quite useful where You have desperate need of an apartment for a temporary period say a few months to 1 year, you can accept the high rent in the contract, and once the contract is ending make a claim with Hyresnämnden ... (hide full quote)

anyone who does that is a fucking parasite.

There is a big difference between charging more than what you pay in rent for an HR and charging what a BRF actually costs. In the future Hyresnämnden will be only be for the former as far too many people have been abusing the later.

A contract is a contract. Honour it or go somewhere else.

[wendist]

I don´t understand this "parasite" remark at all!

Hyresnämnden will only decide on a refund if there was something wrong with the rent in the first place and in that case it´s the owner of the BRF who is the “fucking parasite”.

I don´t see why I am abusing Hyresnämnden by simply demanding a verdict on whether a rent has been set in accordance with the rules or not. That´s what they are there for, right?

[viewfromalens]

I don´t understand this "parasite" remark at all!Hyresnämnden will only decide on a refund if there was something wrong with the rent in the first place and in t ... (show full quote)

I don´t understand this "parasite" remark at all!

Hyresnämnden will only decide on a refund if there was something wrong with the rent in the first place and in that case it´s the owner of the BRF who is the “fucking parasite”.

I don´t see why I am abusing Hyresnämnden by simply demanding a verdict on whether a rent has been set in accordance with the rules or not. That´s what they are there for, right? ... (hide full quote)

This type of behavior is why many people choose to only rent to businesses and never to individuals. You may feel it is fair but all it does it decrease the supply of apartments available to people.

Keep in mind in older BRF especially within the tolls (inom tullarna) that have already paid back their loans the månadshyra is usually very low. Like my old 1 bedroom in Klaraplan was only a thousand or so a month. If I can only rent it out for 15% on top furnished then what I rent out a prime location apartment in östermalm for around 1350 SEK a month?? That is ludicrous.

I understand why people are frustrated with rental rates and I can sympathize but I also think people need to consider that many times the owner would keep the apartment empty or rent to a business who won’t go to the government AFTER the term is up simply because people do not want to pay the agreed market rate. It is a lose lose for all then. If you want to change things perhaps better to ease the ability to set rental rates through the legislative process is more effective and helpful for the supply of apartments in stockholm.

[grymagnusson]

I don´t understand this "parasite" remark at all!Hyresnämnden will only decide on a refund if there was something wrong with the rent in the first place and in t ... (show full quote)

I don´t understand this "parasite" remark at all!

Hyresnämnden will only decide on a refund if there was something wrong with the rent in the first place and in that case it´s the owner of the BRF who is the “fucking parasite”. ... (hide full quote)

you are a parasite because you take the liberty of living in an apartment in an area you can't afford and then expect the BRF owner to subsidise your rent.

I don´t see why I am abusing Hyresnämnden by simply demanding a verdict on whether a rent has been set in accordance with the rules or not. That´s what they are there for, right?

The current rules date back 2 decades from a time when financing a BRF in the inner city was roughly equivalent in cost to an HR - that situation no longer exists and that is why the rules are set to change.

While rent control still exists there has long been a de-facto free market. HR contracts exchange hands for around 10k/sq metre and BRFs are widely rented according to supply and demand. A 3a on Söder through Bostad Direkt typically rents for around 12-15k per month.

If these rents were excessively high then I could understand the complaint, but they are not.

The problem with Stockholm's rental market is due to the system strangling available supply, not due to BRF owners trying to cover their mortgage and bills.

[Yorkshireman]

you are a parasite because you take the liberty of living in an apartment in an area you can't afford and then expect the BRF owner to subsidise your rent.

That is an unfair comment to those that rent! It would be more correct to say that those who try to collect higher rents than what is stipulated by current legislation (Hyresnämnden) are preying on those who need a place to live when there is a severe lack of rentable properties.

The current rules date back 2 decades from a time when financing a BRF in the inner city was roughly equivalent in cost to an HR - that situation no longer exists and that is ... (show full quote)

The current rules date back 2 decades from a time when financing a BRF in the inner city was roughly equivalent in cost to an HR - that situation no longer exists and that is why the rules are set to change. ... (hide full quote)

Again, not totally correct. Whilst the rules are old they were put in place to ensure that there was equal access and a relatively stable market price for rented accomodation. BRF was not counted at that stage, and the rules within BRFs already had/have restrictions on rent-out periods.

You need to look beyond the initial press exposure of the proposed changes in the rules. The government highlights mostly the removel of restrictions placed by BRF rules, and state that it will make more properties available to rent out. What they fail to mention equally is that overall rents will go UP quite a bit, and the change in rules will allow current lower cost rents to be increased. The aim is to eliminate the big difference between buying and renting costs for apartments... Think about it ... the only way to do that is for rents to go UP, because there is no way they would propose a change in legislation that would bring down property prices!

While rent control still exists there has long been a de-facto free market. HR contracts exchange hands for around 10k/sq metre and BRFs are widely rented according to supply ... (show full quote)

While rent control still exists there has long been a de-facto free market. HR contracts exchange hands for around 10k/sq metre and BRFs are widely rented according to supply and demand. A 3a on Söder through Bostad Direkt typically rents for around 12-15k per month. ... (hide full quote)

The free marker??? HR contracts exchanging hands is a black market that should be avoided! It is not legal to sell a 1st hand contract. Yes it does go on in a big way, but remember buying a 1st hand contract does not prevent the landlord from throwing you out, since it is not legal trade to buy the contract.

The problem with Stockholm's rental market is due to the system strangling available supply, not due to BRF owners trying to cover their mortgage and bills.

Exactly. And the proposed rule change will not resolve this either, it will just mean that rents will rise overall.

I am fortunate to have bought My property, and have not rented for a long time, my concern at the moment in Stockholm is for how it will be when My kids leave home current rules are reasonable enough to allow Me to find rentable apartments for them, maybe help a little also ... but if the proposed changes come into force, then the only option looks like I will have to buy my kids their apartments, as the difference between renting and buying will not be that great ... but rents alone will have gone up!

Students too will find that rented accomodation will go up in price, making a difficult situation in Stockholm much more difficult.

[hatim]

Students too will find that rented accomodation will go up in price, making a difficult situation in Stockholm much more difficult.

<sarcasm>
Who needs those pesky students any way. The capital (read as city comparable to glorious London, Moscow, Washington DC) should have rents very high so only old farts can live there.
</sarcasm>

[grymagnusson]

That is an unfair comment to those that rent! It would be more correct to say that those who try to collect higher rents than what is stipulated by current legislation (Hy ... (show full quote)

That is an unfair comment to those that rent! It would be more correct to say that those who try to collect higher rents than what is stipulated by current legislation (Hyresnämnden) are preying on those who need a place to live when there is a severe lack of rentable properties. ... (hide full quote)

When I first arrived in Stockholm (nb. in the mid-1990s) and started to look for somewhere to live, I was given the name of a so-called "black estate agent". When I sat down with him, he explained the situation.

HR - "here you pay SEK100k and you get a permanent rental contract and pay a rent of 3000 per month."

BR - "here you pay SEK100k, you have to borrow 300k and pay a monthly cost of 5000 per month". And you have to clear the stairwell"

I had spent that summer being shunted around from one third hand rental to the next, but the idea that I should stump up 100k in a brown paper bag for a rental contract just seemed absurd to me. To him it was just matter of fact, that is how the situation had been for as long as he could remember.

I bought a BR and stomached the "extra" monthly cost and responsibility of joining a BRF. Needless to say, I don't regret it.

There are around 150k people in a queue for an apartment in Stockholm. This has been the situation for as long as anyone can remember. If there was an actual shortage of apartments, these people would be lining the streets in their sleeping bags, they are not.

The problem is one of turnover. There is none. And with rents set so far below what people are prepared to pay, it is hardly surprising. NB new builds and rents to match are (relatively) easy to come by.

Second anecdote:

When we had our first child and in need of a larger apartment we started to look around for a buy. Unable to afford a larger place, we took the chance to rent a BR with an extra half a room from an acquaintance.

He wanted 6k, we rented ours out for 5.5 (including all bills). Obviously we didn't want to be homeless with a small child.

We rented out to an American student in Stockholm to complete a masters (at the cost of the Swedish tax payer). We had a long list of tenants, but as we were fresh out of grad school ourselves we understood his predicament and let him have it. He paid the first 12 months up front at a $-SEK exchange rate of 1/11.

We eventually found a new BR for us to buy and it timed well with him heading back to the US. He moved out, we sold and moved in to our new place.

2.5 months later we received a letter from the Hyresnämnden stating that he was claiming back 2k/month - a total of 32,000. What's more by then the $/SEK exchange rate had dipped to around 1/8, so he would basically have lived for next to nothing had he won.

We tried to negotiate with him. Produced all our bills to show that we hadn't charged him a kronor in profit and that all he had done was pay our mortgage and ground rent. We furthermore produced a list of existing rentals on Bostad Direkt (the service that he had used) with equivalent rents.

Nothing made him budge. He just repeated his mantra that he had been informed of the rules. Rules were rules...

Faced with no choice we went to the hearing. For some reason his representative had not arrived and so the presiding judge began the proceedings with one question (directed to the secretary) - "is it a BR or an HR?"

One it had been established that it was a BR, she waited and then clubbed her hammer. "Ärendet avskrivs" (case dismissed. She then said:

"I'd get the hell out of here if I was you." We did.

He appealed. There were no grounds. He lost.

WHO, I ask, is the parasite?

[Puffin]

We tried to negotiate with him. Produced all our bills to show that we hadn't charged him a kronor in profit and that all he had done was pay our mortgage and ground rent. ... (show full quote)

We tried to negotiate with him. Produced all our bills to show that we hadn't charged him a kronor in profit and that all he had done was pay our mortgage and ground rent. We furthermore produced a list of existing rentals on Bostad Direkt (the service that he had used) with equivalent rents. ... (hide full quote)

You don't necessarily get your full costs covered if you rent out a BRF apartment

Probably lucky that the guy didn't turn up

[Yorkshireman]

We tried to negotiate with him. Produced all our bills to show that we hadn't charged him a kronor in profit and that all he had done was pay our mortgage and ground rent.

As @Puffin says, You were lucky. The rules then, and now, do not allow You to recover mortgage in a rent calculation as such. You are only allowed to recover use costs: monthly fee, electricity etc... Mortgage is not counted as a use cost. If the person had turned up Hyresnämnden would have re-calculated based upon similar renting apartments and You would have had to repay. Essentially You just admitted that You did charge an unfair rent according to current rules.

This is one part of the proposed changes, they want to change the start basis for Hyresnämnden decision making in disputes to be the actual use costs of the landlord rather than similar rents in rented properties.
ie. You would be able to recover mortgage costs + monthly fee + other items + profit. Which implies that rents would go up, as it will allow even those renting out now to push up their rents ...and who wouldn't?
And as rents go up due to that, that will create the basis for older property owners with lower use costs to argue that their current rents are too low compared to the real market price! All rents will go up.

[grymagnusson]

I was lucky, he would have won. Perhaps not 2000/month. but all the same. However it should be noted that the judge had the power to find in his favour even in his absence, but CHOSE not to after learning that it was a BR.

Furthermore the Hyresnämnden is not an actual court, it is a mediation service. While its rulings are binding it doesn't collect the money and thus a disgruntled tenant would have to pursue a civil case in the event of a refusal to pay.

Believe me - I know the law - you don't go through that process without reading every last para.

In fact the situation (then as now) has nothing to do with actual costs when renting out a BR. The rent is set according to the average for council owned apartments of a "similar standard".

At the time this meant around 1500 SEK/square metre/year. A figure which the Hyresnämnden will neither provide you with, nor confirm. You have to check it out for yourself and hope.

The new (proposed) regulations are suggested to remove BRs from both the Hyresnämnden system (the government has already limited the reclaim period to a year) and the centrally negotiated rental system.

The proposal furthermore aims to strengthen the individual BR owner in respect to the BRF. The proposals as they were presented have nothing to do with HRs.

We can probably all agree on one thing - the situation in Stockholm is out of whack, for all concerned. It creates a wild west when it intends to create stability.

[grymagnusson]

You would be able to recover mortgage costs + monthly fee + other items + profit. Which implies that rents would go up, as it will allow even those renting out now to push up ... (show full quote)

You would be able to recover mortgage costs + monthly fee + other items + profit. Which implies that rents would go up, as it will allow even those renting out now to push up their rents ...and who wouldn't?
And as rents go up due to that, that will create the basis for older property owners with lower use costs to argue that their current rents are too low compared to the real market price! All rents will go up. ... (hide full quote)

not exactly true - the new max. rental guideline will be based on a standard framework (not individual cases), presumably based on the value of the average value of the apartment and and existing interest rates. Mortgage/capital cost will thus be covered as you say.

[Yorkshireman]

The new (proposed) regulations are suggested to remove BRs from both the Hyresnämnden system (the government has already limited the reclaim period to a year) and the centrall ... (show full quote)

The new (proposed) regulations are suggested to remove BRs from both the Hyresnämnden system (the government has already limited the reclaim period to a year) and the centrally negotiated rental system. ... (hide full quote)

No it does not.
It is suggesting that the starting basis that Hyresnämnden uses in case of dispute is changed in such a way that the starting point is the actual use costs, plus a few other items, of the apartment owner. Which is a radical change to todays method.

The proposal furthermore aims to strengthen the individual BR owner in respect to the BRF. The proposals as they were presented have nothing to do with HRs.

When living in a BR, You are part owner of the BRF. You do not own a BR, You buy shares in the BRF and that share gives You the right to live in the apartment that is the equivalent of that share in the BRF.

Today, most BRFs have a standing rule of allowing subletting for 1 year, possibly extended to 2. Each BRF can change the rules if it wants to (it doesnt need legislation!) it just needs a majority of share-holders.

The proposed change on this part in the law is to remove tha ability of the BRF rules/Board preventing someone subletting.

We can probably all agree on one thing - the situation in Stockholm is out of whack, for all concerned. It creates a wild west when it intends to create stability.

Yes. and it is not going to get better any time soon

What You have to remember is that the proposed changes are aimed at reducing the difference between the cost of renting and the cost of buying, whilst promoted as making more properties available! It certainly will not reduce property prices, rents will go up.

Whilst it does not, and is not promoted as effecting HR's ... look deep into the real political and business motivation behind it ... rents will rise ... changing the rent basis starting calculation for Hyresnämnden ... of-course even HR rents will go up. The current government has said for a while that it wants Market rents, especially in Stockholm.

[Yorkshireman]

Furthermore the Hyresnämnden is not an actual court, it is a mediation service. While its rulings are binding it doesn't collect the money and thus a disgruntled tenant would have to pursue a civil case in the event of a refusal to pay.

I suggest You read a little more with regards how Sweden works... There is absolutely no reason to persue a civil case in this instance if the tenant had won.

One can just take the decision from Hyresnämnden and register the debt with Kronofogden for collection, paying just a minor registration fee. Kronofogden would do the rest, and since the decision would have been binding, you dont have a leg to stand on. The tenant would get the money rather quickly I think?

[grymagnusson]

I accept you may be correct on the last point r.e. Kronofogden.

I sit on the board of a BRF and we have just changed the rules to allow for four years. It was board decision, which obviously can be over-ruled by the AGM.

You do actually own a BR (as in "rätt att bo"), but as you rightly point out that BR formally equates to a percentage of the building, although which in practice means a designated apartment. Your voting rights also equate to that single designated apartment, not to your share of the building.

I agree the new proposals hold little hope for prospective tenants looking for some sort of semi-stable home. They will at least formalize the situation regarding BRs and maybe free up a few more that would otherwise be left empty (because quite frankly the low designated rents make it not worth the trouble for many).

The real changes need to be made in the HR "market". Rent is one issue but also all the swapping, second hand renting for decades, selling and so on. But that market is too sensitive for any political party to touch with a barge pole.

Several surveys have shown that those who benefit most from the Stockholm model are medium-high income inner-city dwellers - so even the Alliance don't want to piss off their voters. Those that subsidise their relatively low rents are those living in comparatively high rental apartments in the burbs (even council-owned housing companies need to balance the books)

Here is an article in which Hans Lind espouses the only politically expedient solution:

http://www.thelocal.se/24910/20100210/

as for what it "fair" in the situation - I think that requires a broader, somewhat philosophical discussion and extends far beyond Hyresnämnden's guidelines...

[wendist]

I was lucky, he would have won. Perhaps not 2000/month. but all the same.

You admit the guy had a case then go on and call him a parasite!

Then you take it all one step further and call anyone who might want to use Hyresnämnden a parasite!!

Under the rules that are in place today a landlord face the risk of having to repay a tenant.
With the new rules, when or if they come into effect, that is all gone which leaves the tenant with only one option, to terminate the contract.

Which leaves the the tenant without a place to live and the landlord get to keep the money plus the fact that he can start all over again with a new tenant.

Guess who will take advantage of that situation!

There are two things about the new rules that just about everyone on this thread seem to agree on:

a. They won´t do much to solve the housing problem in Stockholm.

b. Rents will go up and that will cause problems for a number of people most of which will have a low income like nurses and librarians and other ordinary people. It will leave Stockholm even more segregated than it allready is.

I live in a BRF but not in Stockholm so I personally will not be particularily affected by the new rules but I know a bad idea when I see one and this one is bad.

You on the other hand seem to live in a very self-centered universe.