Renting an apartment
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Is the lessor renting on their own or using a mediating agency?
The lessor is renting on their own
It is a fairly common practice that the lessor does not use any middlemen in the renting procedure. The renting party is well aware of the renovations, both past and future. There are various guidebooks for landlords who want to rent an apartment on their own.
Suomen Vuokranantajat (The Finnish Landlord Association) offers advice and counseling support for their members by phone on issues regarding taxation, legislation and common practices. Visit www.vuokranantajat.fi for further information. Kiinteistöliitto (The Finnish Real Estate Federation) has a phone counseling service that is open to everyone and free to members of the federation. It specializes in issues involving housing co-operative limited liability companies. www.kiinteistoliitto.fi
Using a mediating agency
It is up to the lessor whether to use a mediating agency or not. Likewise the tenant has the same choice when looking for an apartment. According to the current legislation the party responsible for hiring the mediator is responsible for the expenses involved. Further legal information and the current legislation: FINLEX ® - Ajantasainen lainsäädäntö: 15.12.2000/1074 (in Finnish & Swedish)
The mediator’s responsibility is to present the apartment to the tenant, to connect the two parties and assist with the lease agreement. The agency should perform its duties with professionalism and precision and according to fair mediating practices, taking into account the needs of both parties.
The tenant, the choice of apartment and familiarization of the apartment
The tenant chooses an apartment as their home. Important factors to be taken into account are the condition of the apartment, the amount of rent and the stability of the lease. It is a good idea to find out beforehand if the lessor has plans to sell the apartment and if there are any renovations planned for the apartment in the future. Some renovations can render the apartment temporarily uninhabitable, e.g. renovation of the façade or the balconies and pipe repairs.
There are many things that factor into the tenant’s choice of apartment. Such factors include distance from the local school/kindergarten, proximity of stores and access to public transportation. Tenants value the stability of the lease often as much as the location of the apartment.
When assessing the cost of rent one should take into account the condition of both the apartment and the building as a whole. The various perks such as a common washing room, parking space and a fixed internet connection may have a decisive role.
It is important to review all the rooms when checking the apartment for the first time. In general the basic household appliances (stove, refrigerator) are considered a part of the lease and are supposed to function properly. When presenting the apartment the landlord (or the mediator) is responsible for sufficient lighting in the apartment.
During the presentation one should pay attention to sounds and smells of the surrounding area caused by traffic, smoking & restaurants.
One should also find out about the possibility of extra storage space included in the lease, such as attic or basement closets or a garage.
What to agree upon in the lease agreement?
The form of the lease agreement
The lease agreement should always be in writing; do not accept an oral contract. The contract should include everything you have agreed upon. If the agreement is altered during the lease, this should be written down in the contract. If the pre-made forms seem too limited you can use them as a template in compiling your own, more detailed contract. Insufficient space on the form is not an acceptable reason to exclude something from the contract.
Lease agreement forms are sold online and in book stores.
The landlord and the tenant are specified in the agreement along with their contact information. It is advisable to have, in addition to the street address, both the telephone numbers and possible email addresses of the two parties. It is advisable to list the preferred means of contact to address any problems with the property during the lease. Getting in contact with a lessor residing overseas can be rather difficult without clear contact information. If the lease includes furniture it is advisable to enclose a list of the pieces provided.
Agreement on the lease period
The length of the lease is determined according to what has been agreed between the lessor and the tenant. The two options are a fixed-term lease and a lease that is valid until further notice. A lease that is valid until further notice is continued until one of the parties gives notice on the lease, served in writing and verifiable. When a lessor gives notice on a lease agreement, the legal period of notice in leases that have been in force for less than a year is three months and six months in cases of leases that have lasted over a year or more. The tenant’s period of notice is one month, regardless of the duration of the lease. These periods are established by law and cannot be altered in a way that is unbeneficial to the tenant.
In a fixed-term lease the tenant and the lessor agree upon the move-in date and also the end date of the lease. The lease ends without any special actions according to the agreement on the end date. The agreement is binding to both parties and cannot be prematurely brought to an end without a court order or mutual agreement. Bear in mind your ability to pay for the apartment for the entire period when making a fixed-term contract.
Paying the rent is the number one duty for the tenant. The rent is due on the second day of the month unless other arrangements have been made in the agreement. If the second of the month is a Saturday or a holiday, the rent is due on the next workday. It suffices that the rent is paid on the second day; the sum doesn’t have to reach the lessor’s account during the same day.
Unless otherwise agreed upon the rent includes the cost of e.g. using the water.
The rental amount is often negotiated during the first presentation of the apartment. An apartment in good condition is obviously more expensive. The location plays an important role in the pricing as well. If the tenant takes responsibility in the upkeep of the apartment, it should have an effect on the rent as well.
What is a security?
A security is an assurance given to the other party to assure that the lease agreement is complied with.
In most cases the tenant is the one paying the security as an assurance of his/her capability to pay the rent and take appropriate care of the apartment.
The security is handed to the lessor to assure that the tenant takes good care and maintains the proper condition of the apartment. Before the move it is advisable to perform a condition check of the apartment. Using a checklist and photographing the apartment noting the pre-existing signs of wear and tear is a good idea.
The security is property of the tenant during the entire lease. The lessor is required to store the security in a way that it can be easily separated from the rest of his/her belongings, e.g. in a separate bank account. The security cannot be used to repair normal wear and tear caused by normal living. The collateral security must be returned immediately after the lease has been terminated if there are no outstanding faults that need to be repaired at the cost of the tenant.
What is the maximum value of the security?
The amount of the security can’t exceed the value of three months’ rent. For instance, if the monthly rent is 620 €, the maximum security is 1860 €. Naturally, the security can also be less.
How to deliver the security?
It is up to the lessor and the tenant to agree upon the means of delivery of the security.
A security delivered in cash should be deposited in a bank account in the name of tenant so that the interest gains go to the tenant. If the money is deposited in a bank account of the lessor the parties should agree upon who will receive any interest gained.
Using the assets on this account for anything but the safe-keeping of the security is illegal. The assets cannot be used, even temporarily, to aid the liquidity of the lessor.
Never deliver the security before visiting the apartment!
The use of the security
The security is returned to the tenant at the end of the lease. Before returning the security the parties should perform a final review of the apartment, noting the possible faults in the apartment caused by the tenant. The review is to take place after the apartment has been emptied and cleaned.
According to fair rental practices the tenant has to take away all their belongings and clean the apartment. If the final cleanup has been insufficient the lessor is entitled to use part of the security to cover the costs of proper cleaning.
In case the lessor doesn't return the whole security to the tenant, the lessor is required to give a detailed account of the reasons for not returning the security and present a summary of all the materials and man-hours used.
Even though the lease agreement may not obligate the tenant to acquire home insurance it is highly recommended. The insurance covers damage to movable property in the apartment and in storage areas in case of a fire or water damage. Insurance of the real estate does not cover damage done to movable property.