Second-Hand Rental Contract: What's Important to Know?

Renting out or renting in the second hand is a common way to solve housing situations, but it also requires a correctly drafted second-hand rental contract. It is crucial that both the primary tenant (who rents out) and the new tenant understand their rights and obligations. This document provides an in-depth guide to what is important to consider when creating or signing such an agreement.

Basic Rules for Second-Hand Rental

Before we delve into the details of the second-hand rental contract itself, it's important to understand the basic rules governing second-hand rentals in Sweden. According to the Swedish Land Code (Jordabalken), landlord permission is generally required to sublet one's residence. If you rent a home with a right of residence (bostadsrätt), permission from the housing association is needed. Renting out without permission can lead to the termination of the rental agreement.

When is Permission Required?

Permission from the landlord (or housing association) is generally always required. However, there are exceptions, such as for short-term rentals due to illness, military service, or studies in another location. Exceptions may also apply in cases of death or temporary separation. It is always best to check with your landlord or association what applies in your specific situation.

Applying for Permission

The application for permission should be made in writing well in advance of the rental period. Specify who you wish to rent to, for what period, and why you need to sublet. The landlord has the right to refuse if there are grounds for it, for example, if the prospective tenant is not deemed reliable or if there is a risk of disturbances.

Creating a Valid Second-Hand Rental Contract

Once permission is granted, it's time to draft the agreement. A second-hand rental contract should contain clear terms to avoid future disputes. It is important that the agreement is in writing and that both parties have a copy.

Important Clauses in the Agreement

• Parties: Full names and personal/organization numbers of both the primary tenant (landlord) and the new tenant (subtenant).
• Property: Clear address and specification of the rented property, including any storage units or parking spaces.
• Rental Period: Clearly state the start and end dates of the rental. If the agreement is indefinite, specify termination notice periods according to law or as otherwise agreed.
• Rent: The monthly rent amount, and what is included (heating, water, electricity, internet, etc.). It's important that the rent is not unreasonably high. The maximum amount is usually the original rent plus a reasonable fee for operating costs and furniture, if applicable.
• Deposit: If a deposit is taken, specify the amount and the terms for its refund.
• Termination: Conditions for termination, which must comply with statutory notice periods (usually three months for the subtenant and three months for the primary tenant, unless otherwise agreed for a shorter period).
• Rules and Order: Reference to the property owner's rules of conduct and any specific rules for the second-hand rental.
• Inspection: Conditions for inspecting the property upon move-in and move-out.

Avoiding Common Pitfalls

A common pitfall is charging an unreasonably high rent. The new rent should not exceed the original rent by more than 10-15%, plus any compensation for furniture and operating costs. Another common mistake is not obtaining the landlord's or association's approval, which can lead to problems. Also, ensure that the primary tenant remains responsible for the property and that there is clear communication among all parties. Regulating this in a second-hand rental contract is paramount.

Rights and Obligations

Both the person renting out in the second hand and the person renting in the second hand have specific rights and obligations regulated by rental law and the agreement.

For the Person Renting Out (Primary Tenant)

You remain ultimately responsible to your landlord for the property. This means you must ensure that your subtenant behaves properly, pays the rent, and does not cause disturbances. You are also responsible for ensuring that the property is returned in good condition when the lease expires. If problems arise with the subtenant, you must handle them and potentially take action.

For the Person Renting in the Second Hand (Subtenant)

You have the right to use the property according to the agreement and have a right of possession (besittningsskydd), although it may be weaker than in a direct rental from the property owner. You have the right to demand that the property is in good condition and that necessary repairs are carried out. You are obliged to pay the rent on time and to follow the rules applicable to the property and the rental.

FAQ about Second-Hand Rental Contracts

Can I charge more rent than I pay myself?

Yes, but within limits. You can add a reasonable fee, usually around 10-15% of your own rent, to cover administration and potential extra costs. If you furnish the property, you may also receive compensation for this. However, the rent should never be unreasonably high.

What happens if my subtenant doesn't pay the rent?

You, as the primary tenant, are responsible to your landlord. You must then take action and demand payment from your subtenant. If the problem persists, you may need to terminate the subtenant's agreement, which may require a formal process.

Can I rent out a furnished apartment in the second hand?

Yes, it is entirely possible to rent out a furnished apartment in the second hand. When renting out furnished, you can usually charge a higher rent than for an unfurnished rental, to compensate for the wear and tear on and the value of the furniture.

What is the notice period for a second-hand rental contract?

Unless otherwise agreed, a three-month notice period usually applies for both the tenant and the landlord. This applies if the agreement is indefinite or if termination occurs during a contract period longer than three months. Always check what your specific agreement states.

What is the right of possession in a second-hand rental?

The right of possession means that you, as a tenant, have the right to remain in the property even if the rental period has expired, under certain conditions. In second-hand rentals, the right of possession is often weaker and may be limited, especially if the rental is for a fixed term or if the primary tenant needs the property themselves. It is important that the terms of the right of possession are clarified in the second-hand rental contract.