Housing

Disputes between a lessee and a lessor are often related to the condition of an apartment, unpaid rent, or returning a security deposit. In apartment sales, disputes are usually related to deficiencies or defects of an apartment or real estate unit that are discovered only after the sale is made.

Leasing an apartment

The lease of an apartment is based on an agreement between the lessor and the lessee. Lessees are responsible for paying the agreed rent on time and taking good care of the leased apartment. They are not responsible for any wear and tear resulting from the usual use of the apartment.

Lessees must contact the lessor if the apartment is damaged or the lessee discovers deficiencies whose rectification is the responsibility of the lessor. The lessor’s permission must be sought for all renovations or alterations made to the apartment.

Prepaid rent means rent that is paid in advance. Security deposit means an amount that is deposited as a security against any damage to the apartment, for example. The lessee pays the security deposit to the lessor at the start of the lease. The lessor returns the security deposit to the lessee when the lease ends if the lessee has paid all rent instalments and the apartment has been kept in a good condition and has been cleaned after moving out.

Rent increases

Lessors can increase rent if the opportunity to increase the rent has been agreed in the lease agreement or otherwise with the lessee. The lessee must always be notified of a rent increase two months in advance.

The basis for increasing the rent must also always be recorded in the lease agreement. For example, the basis can be an index-related increase, a percentage-based increase or a euro-nominated increase.

Terminating a lease agreement

The period of notice for a lease agreement is

• one month, if the lessee terminates the agreement
• three months, if the lessor terminates the agreement and the lease period has lasted less than one year
• six months, if the lessor terminates the agreement and the lease period has lasted at least one year.

If the lease agreement is fixed-term, it will end on the date specified in the agreement. It can be terminated earlier only in special cases.

Cancelling a lease agreement

A lessor can cancel a lease agreement if the lessee violates the terms of the lease agreement by repeatedly not paying the rent or if the lessee’s behaviour in the apartment is disturbing.

If a lease agreement is cancelled because of unpaid rent, the agreement can be cancelled to end immediately. If the reason is the disturbing behaviour of the lessee or their poor management of the apartment, a written warning must be issued to the lessee and they must be provided the opportunity to correct their behaviour.

Purchasing an apartment or a real estate unit

Before deciding to buy, you should determine the condition and actual price of the apartment or real estate unit you are planning to buy. If the apartment is in a housing company, it is also advisable to find out the housing company’s financial situation and whether the plot of the company is leased or owned by the company. In addition, purchasers should examine their own ability to pay to make sure that taking out a housing loan will not overburden their finances.

An offer to buy an apartment or real estate unit is binding unless the offer specifically states the grounds based on which the offer may be revoked. Such grounds include being granted a reasonably-priced housing loan or carrying out a property inspection.

The seller has the right to decide what kind of purchase offer they are willing to accept on the apartment or real estate unit they are selling. After the seller has approved an offer, the seller usually cannot withdraw from the sale unless they pay a contractual penalty.

Newly built apartments

If the building is new, the seller must organise a final inspection before anyone moves into the building. In addition, the seller is responsible for organising a one-year inspection approximately one year after the new apartment becomes inhabited. The seller is responsible for fixing any deficiencies or defects found in the final inspection and the one-year inspection.

The purchaser of the apartment is responsible for inspecting the apartment and notifying the seller of any deficiencies within a reasonable time. After the one-year inspection, the seller is only responsible for hidden defects that existed in the apartment at the time of the sale but that could not be detected earlier.

If the seller does not fix the defects of the apartment or fixing them is not possible, the purchaser can demand a price reduction or, in extreme cases, a cancellation of the sale.

Used apartment

The seller of a used apartment must provide the purchaser and real estate agents all information on the apartment that could affect its sale. Such information includes any deficiencies and defects of the apartment and renovations planned by the housing company. The seller of the apartment must have up-to-date documents on the financial situation of the housing company.

The purchaser of the apartment should carefully review all documents available on the apartment. If a defect is discovered in the apartment after the sale that should have been discovered in the move-in inspection, the purchaser cannot demand compensation retroactively.

If a defect is discovered in the apartment after the sale, the purchaser must notify the seller within a reasonable time and at the latest within two years of the date on which control of the apartment was transferred and sale was finalised. The purchaser can demand a price reduction or, in extreme cases, a cancellation of the sale because of the defect.

Single-family houses

The seller of a single-family house is responsible for ensuring that the information provided on the house, its plot and its surroundings are correct and sufficient. The purchaser is responsible for carefully inspecting the house, any outbuildings, the plot and its boundaries. Before deciding to buy, the purchaser should carefully review the certificate of title, any certificates of mortgages and encumbrances and the extract from the cadastre.

It is often necessary to carry out a property inspection when buying a single-family house. After the sale, a purchaser can no longer invoke a deficiency or defect that they should have discovered in a property inspection carried out before buying the house. It should be kept in mind that all hidden defects cannot be discovered in a regular property inspection either.

If a defect is discovered in the property after the sale, the purchaser must notify the seller within a reasonable time and at the latest within five years of the date on which control of the apartment was transferred and sale was finalised. The purchaser can demand a price reduction or, in extreme cases, a cancellation of the sale because of the defect.

Investigating health hazards such as poor indoor air quality is the responsibility of the municipal health inspector, but in practice, the purchaser commissions a building health expert to inspect the property to be purchased. More information on investigating indoor air quality (thl.fi).

Dispute resolution

Disputes related to housing should primarily be resolved between the parties by negotiation. Advice for settling a dispute can be requested from Consumer Advisory Services. If both parties of a sale are private persons, Consumer Advisory Services only provides general advice. To the website of the Consumer Advisory Services.

The Consumer Disputes Board can issue a recommended decision also for disputes between private persons, if the dispute is related to housing, or apartment or real estate sales. To the website of the Consumer Disputes Board.

There are several organisations that provide mediation services for dispute resolution. District courts also offer court mediation.

If the dispute cannot be resolved by mediation either, it can be brought to a district court for resolution.