At CLEMENS, we offer the highest level of legal advice in the rental housing sector. We help both small and large landlords, and we also have professional investment companies, property management companies, public authorities and non-profit housing associations as clients.
We regularly train our clients and others in residential tenancy law, including through landlord/tenant associations and external course providers. Residential tenancy law is characterized by frequent changes in the law, which is characterized by political compromises, special rules and exceptions that often do not seem logical. This makes residential tenancy law an extremely complex and difficult legal area to understand. That's why we make sure we are always up to date on the latest legislation and practice from courts and rent tribunals, so we can give you the best possible advice.
The "cycle" of a residential rental property
Advice is relevant both when buying and selling rental properties, but of course also before, during and after a tenancy. The "cycle" of a residential property consists of the "phases" below. Below are some of the many issues that you as a landlord may have to deal with during these different phases. We have extensive experience in advising on all different aspects of these phases.
Buying the property
When buying a rental property, it is of course relevant to look at the property's condition, location, price, easements, etc. But it's just as relevant to take a critical look at the rental conditions in the property. The rents are the "engine" of the property. If the rent is set too high, the property will not provide the expected return if a tenant complains to the rent board and gets the rent reduced. Clarifying the risks and potential opportunities in relation to rent setting, among other things, gives the buyer a more informed basis on which to make their decision. It can also lead to the buyer being able to negotiate the price down or get the seller to provide guarantees.
Rentals
When a property is purchased, it typically comes with tenants. But at some point, a new tenancy needs to be established and a lease agreement signed.
Contract signing
As a general rule, the current standard form should be used for the conclusion of residential leases. However, there are still many factors and possible terms to consider when entering into a residential lease agreement. For example:
- What is the legal rent for the lease in question? And how is the initial rent determined in the first place? For example, is it a lease with "free rent determination", is it "extensively modernized", is it a "small house", or is there a different set of rules for rent determination?
- Should the rent be indexed according to the net price index? And if so, should it also be possible to demand a rent increase on other grounds, e.g. due to increases in taxes and duties?
- Who supplies heat, water and electricity? And are there the relevant meters for this?
- Who is responsible for interior maintenance (painting, whitewashing, wallpapering and floor treatment)? And is it possible to agree that the tenant has other maintenance or cleaning obligations?
- Does the lease have to be fixed-term? And if so, is it valid?
- What condition will the lease be handed over in? And what condition should it be returned in and what can you agree on?
Moving in
When renting out a residential property, a move-in report must also be completed. If this is not done and filled out correctly, the landlord may not be able to require the tenant to pay for general repairs when moving out. Problems can also arise in relation to delaying the tenant's move-in if, for example, the previous tenant has not vacated on time.
Duration of the lease
During the tenancy, a wide variety of issues and disagreements can arise between landlord and tenant. Some of the typical situations are as follows:
The size of the rent
The landlord thinks the rent is too low and wants to increase it. Can the landlord do this? And how? It can be quite complicated to find out whether there is a basis for increasing the rent and, if so, how this should be done. Of course, it also happens that the tenant thinks the rent is too high and complains to the rent tribunal. It is of course problematic for the landlord if the rent turns out to be too high and the tenant gets the rent reduced. This can also lead to other tenants in the property complaining about the rent. We have extensive experience in all types of rent determination cases, including cases regarding cost-based rent, the value of the rented property for "thoroughly modernized" apartments, small houses, etc.
Maintenance
If the tenant does not carry out necessary maintenance or believes that the landlord is not doing so, it may be necessary to clarify who is responsible for the maintenance of the relevant part of the lease. In properties covered by the rules on exterior maintenance accounts, questions may arise in relation to the rules for this and the landlord's opportunities and obligations towards the Landowners' Investment Fund.
Change of tenant
It's a common occurrence that a tenant wants to transfer use to someone else. This can be in the form of subletting, assignment or exchange. The rules are not always clear, and sometimes a tenant may, for example, believe they have the right to transfer their lease to a family member or someone else who is not on the lease.
Improvements
It's in the landlord's interest to continuously modernize their property. This makes the property more attractive and easier to rent out, and can often result in a better return and a higher sales price if the landlord eventually wants to sell. There are many opportunities to optimize rental income by modernizing the property. But there are also many rules, pitfalls and limitations when landlords want to modernize. It is highly relevant for landlords to seek advice on this, as the wrong approach can lead to the landlord not being able to get the return on their investment as expected. In some situations, tenants also have the right to modernize a lease themselves and receive compensation from the landlord if the tenant vacates within a given period.
Termination of the lease
Cases related to lease termination concern the reason for the termination and the move settlement in connection with the termination.
Cancellation and termination
Typically, a lease ends when the tenant terminates the lease. This in itself rarely causes major problems. It also happens that the landlord wants to terminate the lease. This is generally very difficult in the case of residential leases and usually only happens in practice if the landlord is going to use the lease himself or if the building in which the lease is located is to be demolished. Finally, the lease can end due to termination. For example, the landlord may terminate the lease because the tenant has not paid the rent. If the tenant does not vacate voluntarily, the case is brought before the bailiff court, which assists the landlord in evicting the tenant. There may also be other types of breach of contract by the tenant that can justify a termination by the landlord. For example, the tenant may be making noise or otherwise disturbing the other tenants, or the tenant may be subletting illegally via Airbnb. It also happens that the tenant terminates the lease because they believe the landlord is in breach of their obligations. For example, this could be because there is mold in the property and the tenant believes the landlord is responsible for it.
Moving out
When the tenant has vacated, a move-out inspection must be held. There are many rules about when to call for this, when the inspection must be held, that a move-out report must be made with a sufficient specification of the landlord's claims, etc. There are many places where the landlord can make mistakes. If the landlord has made a mistake, it can often result in the landlord losing his or her renovation claim against the tenant. Therefore, discussions sometimes arise between landlords and tenants about whether the landlord has complied with these rules. Disagreements in connection with moving out often also concern the necessity of the work that the landlord requires to be carried out at the tenant's expense and the cost of this work.
Sale or other transfer of the property
When selling the property, you may need advice on the rules of the Tenancy Act regarding the obligation to make an offer.
Advice on the obligation to make an offer is also relevant for other types of transfers, such as transfers between companies, termination of partnerships or joint ownership, etc.
There can be far-reaching and very costly consequences if the landlord overlooks an obligation to make an offer. It can also be very difficult to determine whether a property transfer is subject to an offer at all.
- one piece of advice
- assistance in conducting a rent board case or a court case against a tenant
- a review and update of leases or other paradigms
- assistance in implementing a rent increase
or if you have any other questions or need assistance regarding tenancy law issues.
