Towards a better functioning rental market legislation for subletting residential apartments

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Continuing urbanization, limited housing construction relative to population growth and high production costs are resulting in lucrative subletting markets, particularly in Sweden’s bigger cities and university municipalities.

A survey by Sweden’s National Board of Housing, Building and Planning found that 83% of Swedish municipalities reported a housing deficit in 20191. The situation is especially challenging for people on low incomes and younger people new to the housing market, alongside the elderly and people with disabilities who need special accommodation.

Until recently, many aspects relating to subletting apartments went unregulated in Sweden. However, October 1, 2019 saw new regulations come into force on black market trading covering tenancy agreements and other misuses of apartments. Intended to create a better functioning market for rental apartments, the regulations include new rules for unauthorized subletting, apartment exchanges and trading with tenancy agreements. Rules regarding lodgers were also clarified.

The regulations are intended to increase the circulation of tenancy apartments, as it will no longer be as lucrative for tenants to retain apartments they don’t use themselves. They also aim to improve tenancy conditions and so create healthier living environments for people currently outside the tenancy market.

Every tenant should be aware of the new regulations: they are mandatory and may not be aborted by agreement. Even if the rules regarding subletting and lodgers are not specified in a tenancy agreement, a breach gives the landlord a possibility to terminate the agreement. In particularly severe cases, the tenant may be guilty of committing a crime and risks a fine or even prison sentence.

Lodgers and new rules It is always permissible to have a lodger, so long as the tenant also lives or uses the apartment to a “considerable extent”. “Every tenant should be aware of the new regulations: they are mandatory and may not be aborted by agreement.”

Another criteria for lodging is that the rent the tenant charges the lodger must be equivalent to the lodger’s proportionate share of the rent asked by the landlord from the tenant. If a tenant takes in two or more lodgers, the total rent the lodgers pay may not exceed the rent the tenant pays to the landlord.

If the tenant takes in a lodger and doesn’t use the apartment to a “considerable extent” the lease is considered a sublease. An approval from the landlord or Regional Rent Tribunal (Hyresnämnden) is then required. Unauthorized subletting may result in immediate termination of the tenancy agreement without prior notice, and the tenant must vacate the apartment.

What is a permissible rent for the sublease?

The general rule is that the tenant may not charge the subtenant more rent than the tenant pays. If the apartment is furnished and/or provided with special fittings, a supplement of up to 15% may be added to the rent. Furthermore, the tenant may only charge the subtenant an amount that covers the costs the tenant has for electricity, broadband and other operations and consumer services. If excessively high rent is charged, the tenant may forfeit the tenancy agreement and must vacate the apartment.

If the apartment is subleased without approval from the landlord and an unreasonable amount of rent is being charged, the tenant also risks being fined or sentenced to serve a maximum of two years in prison, as this arrangement is a criminal offence from October 1, 2019. However, the tenant may avoid liability if the offence is considered to be minor, i.e. if the charged rent doesn’t exceed the maximum allowed rent by 20% and the subletting arrangement has only lasted for a limited time.

Criminal offence: To sell a lease and to purchase an agreement

The landlord may terminate a lease if it becomes evident that the tenant requires money or accepts payment when transferring a tenancy agreement. In general, the regulations for selling a tenancy agreement have become more strict. Previously, it was only illegal to sell a lease agreement, but since October 1, 2019 it also became a criminal offence to purchase a lease. The purchaser risks being fined or sentenced to up to two years in prison or, if the offence is considered severe, up to four years. The offence is severe if the amount of the transaction is of a considerable size, the sale is conducted professionally or at a large scale, or if fraud or forgery are involved.

Ultimately, it is always the tenant who bears the responsibilities for the apartment during the subletting period. If the subtenant doesn’t pay rent, disturbs neighbors and behaves badly in other ways, the tenant will be held responsible for the damage and may even risk eviction.

Benefits for all parties?

In the long run, the new rules are expected to push the Swedish tenancy market in a direction where rents for subletting do not get out of hand, unlawful subletting of apartments reduces, and more apartments are released onto the open market. This will, it is hoped, benefit tenants, landlords and Sweden’s tenancy market in general.


1 Bostadsmarknadsenkäten 2019 (Annual Housing Market Survey), National Board of Housing, Building and Planning (Boverket).