5 Mistakes When Writing Swedish Leases
Any lawyer will tell you that the best contracts come out of knowing the law and having experience with the subject matter. It takes a specialist in the field to give sound advice. We have written thousands of rental contracts during the 11 years we have been in business, which has exposed us to a wide variety of situations. We treat our templates as living documents and regularly update them to reflect situations that we come across.
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 contracts are written based on what has been agreed. 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 come in to force continuously. It is difficult to keep up with these changes, or absorb all the information you need, unless you are in the business or specialise 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. Sweden has a separate court system to review and settle disputes in rental relationships; it is called 'Hyresnämnden'. Most precedence comes out of this system. Some cases will be appealed to other courts, but there is a list of types of cases that cannot be appealed.
3. Getting poor advice
Unfortunately many landlords and tenants rely on friends and colleagues that claim to know what they are talking about, but don't (to put it bluntly). We highly recommend that you shop around for someone you are comfortable with and that knows what they are talking about. Make sure to find a licensed property agent with significant experience in lettings to help you out. Many consult a lawyer for guidance. However, if the lawyer is not specialised in rental law, chances are you will get the wrong advice.
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 hellbent on writing a rental contract according to the law for commercial lease. As we are registered agents, we were not able to write a contract for this client since we knew the lease would not be legally binding, if it had been tried. Anyone unfamiliar with the differences may lead you astray and the result will be a contract that is not legitimate. Therefore, having a registered agent who knows what they are doing on your side, is critical.
5. Using free or cheap templates
These have always put tenants and landlords in peril. It was not too bad before the new laws came into effect in 2013 as most would be, despite being bare boned, accurate in the content. 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.
Let me give you a couple of adages; penny wise, pound foolish ... you get what you pay for ... spend little, get little, etc. We think that sums up why expert advice is money well spent.