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Hope for overcharged renters after appeal case

After a Swedish woman was ordered to pay back 30,000 kronor ($3499) to renters she had overcharged, the Swedish Union of Tenants told The Local that the case should bring hope to others who are being ripped off.

Published: 23 July 2015 12:28 CEST
Updated: 23 July 2015 15:46 CEST
Hope for overcharged renters after appeal case
Apartment blocks in Stockholm. Photo: Christine Olsson/TT
The woman had charged 11,000 kronor ($1283) a month to let out her 60 square metre two-room apartment in Enskede in southern Stockholm, which was split between two tenants.
 
After the renters complained that they had been overcharged, she argued that the price was fair because it also included electricity and cable television and because she considered her furniture to be particularly lavish.
 
When the tenants won their case at a rent tribunal over the winter, the woman appealed the decision, but recently lost her case at a Stockholm appeal court, with the decision reported widely in Swedish media on Thursday.
 
The court said that she should not have charged a total monthly fee of more than 7300 kronor ($851) and should therefore pay back around 30,000 kronor ($3499) to the tenants.
 
“It will set a legal precedent in terms of not being allowed to charge so much for furniture,” Gunnel Civerius, a press spokesperson for the Swedish Union of Tenants told The Local.
 
“It will provide hope to others, of course it will,” she added.
 
Under Swedish law, residents with first-hand rental contracts who sublet their apartments are not supposed to charge more rent than they themselves would pay if they were living at the property. But they are allowed to charge extra for bills and add on a further 15 percent if the apartment is furnished.
 
The Swedish Union of Tenants urged other tenants subletting properties who felt they were being ripped off to call them for “basic general advice”. It said that those who signed up to be members of the union, for a cost of 80 kronor per month, would also be entitled to free legal advice.
 
“If you think you are paying too much, we can look up how much you should be paying and help you make your case,” said Civerius.
 
 
The rules are slightly different for tenants renting directly from landlords, who are able to ask people for higher monthly fees based on ownership costs following a change in the law in 2013. Previously they were also supposed to charge rental charges in line with similar apartments owned by public or private housing companies.
 
“They can almost charge whatever these days,” said Civerius.
 
A recent study by Swedish home magazine Hem & Hyra, which compared the prices of apartments listed on Swedish online marketplace site Blocket, suggested that average rental prices for properties in Sweden had increased by around 8 percent over the past year and shot up by 20 percent since the new legislation came in.
 
The average price of renting a studio apartment in Stockholm is now 8247 kronor ($961) a month, compared to an average of 5824 ($679) kronor paid by those with first-hand rental contracts.
 
A two-room apartment in the capital now costs an average of 12,051 kronor ($1405)  while those with first-hand rental leases pay 9708 kronor ($1132).
 
Meanwhile first-hand rental contracts remain almost impossible to score for new residents in the Swedish capital, with 20-year waiting lists in some parts of the city.
 
Price differences are much narrower outside of Stockholm. In Gothenburg a studio apartment costs around 4502 kronor ($525) a month if you have a first-hand contract, or 5254 kronor ($612) without, while in locations including Malmö, Norrköping and Örebro costs are almost identical, according to Hem & Hyra's study.
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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
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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