Rental apartments are offered by private lessors and housing companies as well as public providers such as municipalities.
Tenants for municipal rental apartments are selected on social grounds. Rent charged for such apartments is determined by the absorption principle. The rent is used to cover, among other things, the capital costs of construction and the management costs of the property.
The rent charged for an apartment from a private provider is determined by market forces and the lease agreement.
Agencies specialising in rental apartments can offer information on apartments for rent. An individual looking for a rental apartment can contact an agency and commission them to find an apartment for him.
Payment of commission
A housing agency is only allowed to charge a commission for the procurement of housing from the party with whom it has entered into a commission agreement. This commission agreement must be concluded in writing or electronic format in such a manner that it cannot afterwards be altered.
The party paying the housing agency's fee may be a seeker of rental accommodation, a lessor, or both. For instance:
- The lessor who has concluded a commission agreement pays the commission if the seeker of accommodation finds an interesting apartment in a newspaper or online advertisement, attends the showing and concludes a rental agreement.
- The seeker of rental accommodation pays the commission if the housing agency finds a lessor for this party, who has also concluded a commission agreement.
- If both parties to a rental agreement are customers of a housing agency, the parties each pay a half of the commission. Housing agencies may only collect one commission.
A commission cannot be collected without a commission agreement
Parties may only provide notice of their interest in renting or letting an apartment. However, a notice regarding lessors/leaseholders sent to a housing agency by such means as email does not constitute a commission agreement.
A housing agency may charge a commission only in the event that it has concluded a clear-cut commission agreement with either of the parties before information is relayed.
If a housing agency has a commission agreement with either party, the agency may relay only a notice to the party that has concluded the agreement. In this case, the party that entered into the commission agreement pays the commission.
If the housing agency advertises information it has obtained without a commission agreement to a customer with no valid commission agreement, the agency may not charge a commission from either party.
Illegal housing agency rental operations include, for instance:
- A housing agency advertises rental accommodation by means of a newspaper or online advertisement, but refuses to show the accommodation in question or provide information on it before a prospective leaseholder signs a commission agreement.
- A housing agency provides a customer with information on rental accommodation/leaseholders, but the customer is forced to sign a commission agreement before being able to sign a rental agreement.
If a leaseholder/lessor notices he/she has been forced to pay an illegal commission, the housing agency in question may be requested to refund this commission.
You can contact the Consumer Advisory Service with problems related to commissions. They will provide you with instructions on how to proceed, and how to submit a complaint to the Consumer Disputes Board or Regional State Administrative Agency, if necessary.
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A lease agreement is madie in writing
The tenant and lessor sign a written lease agreement. The agreement should specify at least the following
- the condition of the apartment
- the term of tenancy
- the amount of rent to be paid
- other applicable charges such as water fees
- date and mode of rent payment
- adjusting the rent
- security deposit, if applicable
A lease agreement with a non-fixed term must be terminated in writing
A lease agreement with a non-fixed term remains valid until it is terminated. Either the tenant or the lessor may give notice of termination of a lease agreement with a non-fixed term.
- When the lessor gives notice on a lease agreement the notice period is six months, if the lease has lasted without interruption for at least one year prior to the giving of notice. With leases that have lasted less than one year, the notice period is three months.
- When the tenant gives notice, the notice period is always one month. Unless otherwise agreed, the notice period is counted from the end of the month in which notice is given.
Fixed-term leases are binding for an agreed period of time
A lease agreement may also be made out for a fixed term. A fixed-term lease agreement is binding on both the lessor and the tenant for the agreed period of time.
A fixed term lease agreement should not be terminated unless there is strong justification for doing so. If a tenant terminates a fixed-term lease agreement prior to its expiration, he generally has to pay compensation for damages to the lessor. The maximum amount of compensation is set at the total amount of rent for the months remaining in the term of the lease.
The amount of compensation payable depends on, among other things, the number of months left in the term of the lease and whether a new tenant is found for the apartment. In certain special cases the tenant may terminate a fixed-term lease agreement and be subject to smaller amounts of compensation.
A lease agreement may be terminated with immediate effect when justified
A lease agreement may, in some cases, be terminated with immediate effect if there are particularly weighty reasons for doing so.
- The tenant has the right to terminate the lease agreement with immediate effect if tenancy poses a threat to the tenants' health.
- The lessor may terminate the agreement if the tenant's payments are in arrears, if the apartment has been used for a purpose other than that stipulated in the agreement, if the tenant has caused disturbance to neighbours, etc.
Rental amount and increases therero
The tenant's primary obligation is to pay rent. Rent is paid on the second day of each month, unless otherwise agreed.
- The rental amount is determined by the agreement between the tenant and lessor.
- The amount of rent may be changed on the basis of so-called adjustment provisions in the lease agreement. Such provisions may be based on indexing, percentage-based increases or increases in euro amounts.
Prior to increasing the rent, the lessor must notify the tenant in writing of the new rent and the date on which it will take effect.
Fixed-term leases with a term of less than three years may not include an adjustment provision based on e.g. indexing.
Security deposit may not exceed 3 months' rent
The lessor may require a security deposit from the tenant to ensure that he receives compensation for e.g.
- unpaid rent
- damage caused to the apartment by the tenant
The security deposit may not exceed three months' rent. Generally security deposits are set at one or two months' rent.
The security deposit is returned to the tenant at the end of the lease relationship, if rent has been paid on time and there is no damage to the apartment.
If the lessor refuses to return the security deposit without reasonable justification, the tenant is entitled to claim penalty interest on the unpaid amount.
The interest accrued on the security deposit should be specified in the lease agreement.
Prevent disputes by inspecting the apartment carefully
Most disputes between tenants and lessors arise from returning the security deposit to the tenant: the lessor withholds the security deposit or a portion of it because he considers the tenant to have damaged the apartment or otherwise left it in inappropriate condition.
To prevent disputes, the following should be done:
- Note any defects in the apartment in writing, together with the lessor, at the beginning of the lease relationship. The same should be done at the end of the lease relationship.
- Take photographs of surfaces around the apartment when the lease agreement is signed. The photographs should be dated and kept in a safe place. The tenant is not liable for scratches or dents that are considered normal wear and tear from living.
Upkeep and maintenance
The tenant is liable for ensuring that
- the apartment is kept in normal condition
- the rules of the building are adhered to
If damage to the apartment occurs, the lessor should be notified without delay.
- The tenant must compensate the owner of the apartment for any damages caused.
- The tenant is entitled to pay reduced rent during any time period when the apartment has defects that pose a hindrance to normal living. This naturally applies only when the tenant has not caused said damage himself.
The tenant is generally also responsible for cleaning up the apartment at the end of the lease.
Alterations are subject to the lessor's approval
Any alterations or repairs done to an apartment by the tenant are subject to the lessor's approval. The tenant is not entitled to have repairs done without the lessor's approval, even if the costs of such repairs are borne by the tenant alone. Permission for repairs should be requested in writing.