Right-of-occupancy apartments

A right-of-occupancy apartment is an intermediate form between a rental apartment and an owner-occupied apartment. The party acquiring right-of-occupancy must first pay a right-of-occupancy payment, generally amounting to 15% of the purchase price of the apartment. During tenancy, a monthly residence charge is paid for the apartment.

A tenant may apply for a bank loan to finance the right-of-occupancy payment, the interest on which is tax deductible. The value of the right-of-occupancy payment may be used as security for the loan.

The holder of occupancy rights must use the apartment as his own permanent residence. In special cases and with permission from the building owner, the apartment may be temporarily rented to another person for no more than two years. The apartment may not be bought outright.

Queuing numbers for apartments

Any person aged 18 or older may apply for a right-of-occupancy apartment. There are no income restrictions, but the applicant may not own an apartment in the same area and is not allowed to have the funds to purchase one. This provision does not apply to applicants over 55 years of age or those who are switching from one right-of-occupancy apartment to another.

Applicants need to get a queuing number. They are given out at the municipality in which the apartment is applied for. Once a queuing number has been received, the applicant reports to the owner or right-of-occupancy association of the desired building. Applying for a right-of-occupancy apartment with several building owners is permitted.

Use of the apartment

Maintenance and upkeep are the responsibility of the owner of the apartment building. The holder of occupancy rights may undertake upkeep and repair work by notifying the owner of the apartment. Upkeep work and alterations of major significance are subject to the owner's consent.

Costs

Right-of-occupancy housing is subject to a monthly residence charge to cover capital expenses and upkeep costs.

The amount of the residence charge is based on the absorption principle and it may not exceed the rental prices for apartments of similar quality in the same municipality.

Increases to residence charges are determined by the company that owns the apartment. Notification of increases to residence charges must be made in writing. Tenants have the right to participate in the administration of the right-of-occupancy apartment building and decision-making pertaining to residence charges at least in the same manner as tenants in municipally owned rental apartments.

Giving up the rights of occupancy

The right of occupancy may not be sold freely. The holder of occupancy rights may give up the right by notifying the owner of the apartment. Holders of occupancy rights may also agree to exchange apartments with one another. The apartment may be sold through the owner to a buyer approved by the local municipality.

When the tenant decides to give up the right of occupancy, he receives a refund of his right-of-occupancy payment plus an index increment corresponding to the change in the building cost index.

Updated 4.12.2014 Print