5 Mistakes When Writing Swedish Leases
Swedish rental law is tricky. Like any law, in any country, lawyers that are experts in one area of the law cannot always handle legal issues in another area of the law. So, the best subleases in Sweden are written by a rental agent or a lawyer that is an expert within rental law. We have written thousands of rental contracts since starting the company 2003, which has exposed us to a wide variety of situations and also changes that have been made to the rental law. We treat our templates as living documents and regularly update them.
Writing lease agreements is not just a matter of writing down what has been agreed as it can contravene the law, but writing a contract can actually be illegal in of itself. Below we share some of the areas that mistakes most commonly occur.
1. Contravening the Law
By far the most common and severe mistake we see is that leases are written based on what has been agreed upon and not necessarily what the law dictates. The starting point is to understand the law and what flexibility you have in different areas. Of course, the laws do change all the time and there are precedences that are enacted continuously. It is difficult to keep up with these changes, or absorb all the information you need, unless you are in the business or specialize in this type of law. Another point is that in Sweden you have to be a licensed property broker in order to charge a fee for writing a rental agreement for someone else. Breaking this law can result in a fine or, in the worst cases, incarceration.
2. Ambiguities in the Law
Swedish rental law (Jordabalken, chapter 12, Link to Notisium) has traditionally focused on first hand rentals. However, there is a whole market with subleases that have been largely ignored. It is improving slightly through amendments and precedences, but there are still gaps. We see, landlords primarily, trying to write contracts or ask for things to be put in that could put them in very precarious situations. In Sweden you have three different forms of apartment ownership and they all have their own set of rules when it comes to renting them out. If a friend had one situation for his or her flat, it may not necessarily apply to yours. Owners of several apartments end up in a quagmire of challenges as the contractual status on each of the properties change as another comes up for re-rental. It is very confusing and a situation not for the faint of heart to even attempt to write contracts for. If you should end up in court in a dispute, the court holds you as a landlord to higher scrutiny regarding the lease. If you have errors in your lease in one section, it can negatively effect the rest of your case.
3. Getting poor advice
Unfortunately many landlords and tenants rely on friends and colleagues that want to be helpful and give advice. The absolute worse cases that we see is when landlords that work at large corporations rely on their legal counsel at work to "throw" something together. Legal counsel at work are surely highly qualified to practice corporate law but not qualified at all in rental law unless they switched field. Make sure to find a licensed letting agent with significant experience (+10 years) and that are registered with the real estate board to practice. Many consult a lawyer for guidance. However, if the lawyer is not specialized in rental law, chances are you will get the wrong advice. We offer an affordable lease service under your "Plus Services" in your profile. All of our Swedish rental leases are customized just for the specific rental we write it for.
4. Confusing commercial and private lease
Just because your are renting out your home to a company does not make your rental a commercial one. The property needs to be zoned as a commercial property in order to be considered for a commercial lease. The laws are vastly different for the two categories. We had a case in Bromma where the landlord was set on writing a rental lease according to the law for commercial lease. As we are registered letting agents, we were not able to write a rental ease for this client since we knew the lease would not be legally binding, if it had been tried in a court of law. Anyone unfamiliar with the differences may lead you astray and the result will be a lease that is not legally binding or leave you legally liable. Therefore, having a registered agent who knows what they are doing on your side, is critical.
5. Using free or cheap templates
Free templates on the internet in theory sound great. When we did a stick test of those floating around, we did not see one that was 100% compliant with the new rental law of 2013 nor one that protected the landlord enough. As of 2013, few templates are correct due to the new complexities of the rental law and you will need to have knowledge of how the law applies the situation you are in, to choose the right template.
For most of us, our home is our biggest investment and it behooves us to protect that investment as best as possible. To invest in expert assistance with the lease is money well spent.