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PROPERTY

Stockholm sublets set for ‘dramatic’ rent hike

Tenants' advocates warn that rents charged to sublet flats in Stockholm could double next month due to changes in Sweden's subletting laws, amid reports that rents are already higher than current laws allow.

Published: 24 January 2013 11:18 CET
Stockholm sublets set for 'dramatic' rent hike

Currently, the average cost of subletting a one-bedroom apartment in central Stockholm is 6,200 kronor ($950) per month, which is almost 1,300 kronor more than current rules allow.

The finding comes from an analysis of 71,000 subletting listings published over the last five years on Swedish buy-sell website Blocket and carried out by the Svenska Dagbladet (SvD) newspaper.

“This indicates that many people are charging illegally high rents today,” Terje Gunnarsson, chair of the Swedish Union of Tenants (Hyresgästföreningen) in Stockholm, told the paper.

“The conclusion is that those with centrally located apartments are trying to earn as much as possible.”

However, with a new law that kicks in on February 1st, property owners will be able to charge tenants rent in line with what it actually costs to own their homes.

The changes, approved by the Riksdag in December, are meant to boost the supply of properties available for rent by removing the current cap on how much flat owners can charge would-be-tenants.

Currently, flat owners cannot legally charge whatever they want, instead they are restricted to setting a “reasonable rent” (skälig hyra) tied to the average price charged for rental properties in the area.

That proviso means owners cannot set rent to cover the actual costs of ownership.

But with the new law in place, questions have been raised about just how high the rent prices can soar.

The Swedish Union of Tenants fears that, for example, that the cost of subletting a 42 square-metre apartment in the centre of Stockholm could double to 10,300 kronor.

“This would be a dramatic rise in relation to what is allowed today and affects those who live in a sublet home because they’re unsure of their place in the housing market,” the tenant union’s chief negotiator, Pär Svanberg, told SvD.

However, others welcome the changes.

“The subletting market has been too narrow, we need diversified growth and more homes,” Martin Lindvall, the Swedish Property Federation (Fastighetsägarna), told the paper.

He considers the current laws mean that many Stockholm home owners have chosen not to rent out their homes because the rent they receive wouldn’t have covered their costs.

“Most likely, there should be more housing now.”

TT/The Local/og

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PROPERTY

INTERVIEW: ‘Most foreigners in Sweden don’t know they can get back excess rent’

In Sweden, people subletting apartments are not allowed to charge more in rent than they themselves pay. But foreign subtenants don't always know this. We asked Roland Sjölin, lawyer at the Swedish Tenants' Association, about how to get back excess rent.

Published: 18 April 2024 15:19 CEST
Updated: 21 April 2024 08:12 CEST
INTERVIEW: 'Most foreigners in Sweden don't know they can get back excess rent'

More and more of the people asking the Swedish Tenants’ Association, Hyresgästföreningen in Swedish, for help with excess rent are foreigners, Sjölin told The Local in an interview.

“The problem is that if you’re coming from another country, and you’re subletting an apartment, you’re probably not familiar with the rules in Sweden, because in other countries, it might be okay to overcharge your tenants.” 

He said that clients from India in particular seeking help from the association were now “very common”. 

“Many people come here to work as engineers in the IT sector and then have to rent somewhere,” he said, adding that as a group Indians appeared to be “very aware of their rights.”

Sweden’s rental sector is heavily regulated, with first hand contracts negotiated between landlords and the Tenants’ Association, and the rent that can be charged for second-hand contracts limited to only a small fraction above what the first-hand renter pays. 

“You’re not allowed to make any profit subletting an apartment in Sweden,” Sjölin explains. “You can only charge the subletting tenant the same rent as you [the first-hand tenant] are paying to your landlord, and then you can add the costs for internet and electricity, and perhaps a parking lot, if that is included.” 

Tenants’ Association lawyer Roland Sjölin. Photo: supplied.

You can also add a påslag or “markup”, if you are renting out the apartment fully furnished, but this cannot exceed more than 15 percent of the rent. 

That doesn’t mean that most landlords follow the law. The competition for rental apartments, especially in Stockholm, is so intense, that unscrupulous sublet landlords often try to get away with charging well over the legal amount, charging what is known in Sweden as ockerhyra, or “excess rent” and hoping that their tenants are too desperate to complain.  

What many foreigners do not realise is that even after the rental period is over, they can still get back any excess rent they have paid by applying to the Rental Board or Hyresnämnden, which functions like a court judging rental disputes. 

“If you have the evidence then it’s fairly easy,” Sjölin said. “I get a new case every second week on repayment of unfair rent, and I think that I win most of them.” 

“Nowadays, you can get paid back excess rent up to 24 months back in time, so people tend to get more money,” he added. “In some cases, they can get 200,000 kronor. In other cases, perhaps it’s only 30,000 kronor or 60,000 kronor. It depends on how long you have rented the apartment, and how excessive the rent you’ve been paying has been.”

The first step is to establish what would have been a fair rent, either by asking your landlord what they themselves pay directly or by checking with the Tenants’ Association.

“Because we negotiate most rents in Sweden, we normally know what the firsthand rent is,” Sjölin explained.

Then you need to collect together your evidence.

“It’s a good thing to have a written contract and also papers from your bank showing that you paid rent every month, and perhaps photographs of the apartment, so the rental board can get an idea of the apartment you were renting and what would be a fair rent, and also the termination for the contract so you can show the court how long you’ve been living in the apartment.” 

But Sjölin underlined that since Sweden has free burden of evidence, none of this is essential. 

“Even if you’ve been paying in cash, if you have witnesses who can testify what you were paying each month, you still have a chance of getting your money back. It’s a bit more tricky, but I’ve won two cases like that this year.” 

People in Sweden, he explained, tend to wait until the rental period is over before seeking to get paid back excess rent rather than challenging their landlord while they are still living in the apartment. 

“You don’t have any legal protection for your home for the first two years, so if you bring the matter up with the person you’re renting the apartment from you risk losing your contract and having to move out, so most people wait until they’re supposed to move anyway,” he said.

If you apply to the rental board for a refund close to the day you move out, you can then make your landlord pay back all excess rent paid in the 24 months leading up to the date you contacted the rental board.

If you are a member of the Tenants’ Association, you can contact them and ask for help with your application, but there are also specialist companies, like Orimlig Hyra AB who will buy your case off you and give you a refund within 48 hours, saving you a long wait in exchange for a cut of the money reclaimed. 

Sjölin said that the rental board normally took about 8 months to come to a judgement, but that if the person with the first hand contract appeals, that could extend the waiting time by between six months and a year.

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