Information package for the lessor

The most important concepts of renting in a nutshell

Responsibilities, rights and practical matters for the lessor

Rent increases based on indexes

Taxation of rent income

Ordering a free guide to renting

The most important concepts of renting in a nutshell

Mandate

A lessor can rent his or her apartment either directly or with the help of an agent. Vuokraturva is a market leader in renting apartments in the Helsinki region and a member of the national association of real estate agents’ (Suomen Kiinteistönvälittäjäliitto), which guarantees the reliability of our service. When you give a mandate to Vuokraturva, we take care of everything for you. You do not have to go through the trouble of looking for a tenant or worrying that everything is legally correct in the lease agreement or doubting whether you can safely give your apartment to the tenant that you have chosen.

The process of renting your apartment through Vuokraturva starts with our agent and you signing a written mandate to rent your apartment. This mandate is an agreement of the assignment to rent and the conditions of the assignment. Vuokraturva’s assignments are always in keeping with the good practices of rental apartment mediation. This means that our assignments always meet the formal requirements of a mandate stated in the law regulating apartment mediating. The mandate is always made in two identical copies, one of which stays with you.

According to the good practices of rental apartment mediating, once you have given us a mandate to rent your apartment we will actively start marketing and looking for a tenant. Our service includes getting to know the apartment, making an estimate of the right rent, marketing the apartment, arranging showings, getting to know our applicants’ backgrounds, negotiating an agreement, making the lease agreement, handing over the keys and checking that the security is in order. In addition, we give extra assurance for the quality of our work by guaranteeing the rents of the first year, so you can be sure that we thoroughly checked out our applicant.

For more information on our service or about the conditions of our mandate, please call (09) 6877 550 or send an email to asiakaspalvelu@vuokraturva.fi

The lease agreement and duration of tenancy

You always have to be careful when making a lease of residence and know the laws regulating the agreement. For the lessor, it is wise to remember that the conditions in a lease of residence must always be in keeping with the law regulating renting as well as with good practices. If you give Vuokraturva a mandate to rent your apartment, Vuokraturva will make the lease of residence for you and you can then be sure that the lease of residence contains nothing contrary to the law.

A lease of residence can be in force either until further notice or for a fixed period. If the lease of residence is valid for a fixed period, the end date is specified in the agreement at the time that agreement is made. Tenancy will end on the specified date with no separate notice. A lease agreement for a fixed period is binding on both parties for the entire period and it cannot be terminated before the end date. However, in a fixed period agreement the tenant can terminate the contract before the end date following a pre-determined notice schedule. However, the lessor cannot end a fixed-term-lease agreement even with a separate condition stated.

Another, and most common, possibility is to make the lease of residence so that it is in force until further notice. Provided there no special conditions in the lease concerning the first possible date for giving notice, both parties can give notice to the other whenever they want following the stipulations and times of notice in the law regulating renting (AHVL).

When the lease of residence is valid until further notice, the times of notice are as follows: If the lessor gives notice before the tenancy has lasted for a year, the time is three (3) calendar months. After one year, for the lessor, the time is six (6) calendar months. If the tenant gives notice, the time is always one (1) calendar month. If you want an agreement that is in force until further notice to last for at least a certain period, it is possible to state a first possible date to give notice. This is in keeping of good practices in rental apartment mediation. When you give Vuokraturva a mandate, you can agree with our agent about the time you want stated in the lease agreement.

Giving security

Nowadays, security is given almost without exception. The purpose of security is to prevent problems in tenancy and to help the lessor deal with possible disturbances more easily. Security can be agreed to cover more than just the payment of rent; it can also cover possible damage to the apartment.

The parties can agree on the amount of security, but the usual conventional amount is equivalent to two months’ rent. The maximum amount stipulated by law is 3 months’ rent. The most common form of security is a separate bank account only for the purpose of security opened a bank by the tenant. The lessor will get a security document of this account. Another possibility is that the security is paid directly into the lessor’s bank account.

When Vuokraturva takes care of renting your apartment, we check that the security is in order every time we hand over the keys. After this, we send you the possible security document to keep for the entire period tenancy, thus making the rental more secure.

Giving notice

Notice must always be given to the other party in writing in order to prove that notice has indeed been given. When you as lessor give notice to a tenant, you must also state the reason for giving notice. The reason must be in keeping with good practices. Typical reasons include needing the premises for personal use or for family members, selling the apartment or changing the conditions of the agreement.

If the lease agreement is in force until further notice and the tenancy has lasted at least one year, the period of notice for the lessor is 6 calendar months. If the tenancy has lasted less than a year, the period of notice for the lessor is shorter, 3 calendar months. If the tenant gives notice, the period of notice is 1 calendar month. The tenant does not need to state a reason for giving notice. The period of notice begins with the last day of the month the notice was given, unless otherwise agreed. In the lease of a residence, it is possible to state the earliest possible date from which the period of notice can begin. More information about this is in “The lease agreement and the duration of tenancy” above.

If necessary, Vuokraturva will help you with questions regarding giving notice and making the written notice of termination.

If you would like more information about the things mentioned above or if you have other things on your mind concerning renting, you can order a free rental guide or contact us personally! Telephone (09) 6877 550 or send an email to asiakaspalvelu@vuokraturva.fi

Responsibilities, rights and practical matters for the lessor

The main responsibilities of both parties

The lessor’s main responsibility is to give the tenant occupancy of the apartment at the time and in the condition stated by contract or law. The lessor has the right to enter the rented apartment during tenancy only on certain separately specified occasions such as to check the condition of the apartment or to show it to others.

The main responsibility of tenants is to pay the agreed rent at the agreed time and to take good care of the premises. If damage is caused to the apartment due to carelessness or negligence, the tenant is obliged to pay the lessor for the damage. The tenant is also responsible for damage caused by visitors.

The condition of an apartment and taking care of it

The condition of an apartment, maintaining the condition, and the tenant and lessor’s rights to make changes in the apartment are all regulated by the law concerning renting (AHVL). However, it is possible for the two parties to agree differently in many ways than stated in the law. It is advisable to make this agreement in writing. In many instances concerning the condition of an apartment, the parties have freedom of contract.

It is advisable for both tenant and lessor to check the condition of the apartment before the start of tenancy. This way, both have a realistic view of the condition of the apartment when tenancy begins. By doing so, it is easier to see eye to eye about any possible damage by the tenant, and damages and defects that were there to begin with when tenancy ends. It is possible to document the condition of the apartment. We give our customers forms for the condition check. We can also check the condition for you.

If the apartment has to be renovated or changed in some way during tenancy, the parties can agree on who will do it, pay for it and supervise it. It is also a good idea to agree on the choice and purchase of materials. Most often, normal wear and tear during the tenancy of an apartment is the lessor’s responsibility, but it can also be agreed otherwise. The lessor also takes care of water and kitchen equipment and cupboards, unless otherwise agreed.

When the tenancy ends, it is advisable for the lessor to make sure that the apartment is in the same condition as it was when rented, whilst bearing in mind normal wear and tear. The final condition check has to be performed as quickly as possible after tenancy has ended. If the tenant has damaged the apartment, the lessor is entitled to fix the damage at the tenant’s expense. The funds needed for this can be deducted from the security payment. The security can also be used to cover unpaid rent.

If the lessor finds nothing wrong during the final inspection and all rent has been paid, he or she must return the security immediately to the tenant. If the collateral is in the form of a separate security account, you can end the security account by signing your security document and returning to the tenant.

Other practical responsibilities

Other practical responsibilities and expenses can be stated in the lease of residence. If necessary, these stipulations can also be written in a separate appendix. Besides rent and the water fee, the lease of residence can include conditions for electricity, heating, furniture, insurance, pets and smoking. If you rent your apartment using Vuokraturva, you can discuss with our agent about the special conditions to be included in the lease agreement.

Usually, the tenant takes out and maintains the electricity agreement. If the apartment has central heating, the heating expenses are included in the rent. In houses with electric or oil heating, the tenant is most often responsible for the heating expenses, which is always wise to write into the agreement. In furnished rented apartments, a separate appendix is often written to list the furniture in the apartment.

It is advisable for the lessor to demand that the tenant takes out and maintains home insurance for the entire period of tenancy. In agreements written by Vuokraturva, home insurance is always one of the basic stipulations. When the lessor has good reason, he or she can prohibit the tenant from smoking or bringing pets into the apartment. Another possibility is that the tenant agrees to pay for any possible damage caused by his or her pets.

Increasing the rent

Stipulation for a rent increase

All leases of residence can include a stipulation for increasing rent that is valid until further notice. Such a stipulation can be added in fixed term agreements only if the tenancy lasts more than 3 years. It is advisable for the lessor to include this stipulation in a lease of residence whenever possible. This helps to ensure that the rent is in line with the cost of living.

There are many possibilities to increase rent but most commonly, the rent is tied to an index. The most common is the consumer price index, which is also the presumed stipulation in our contracts. The consumer price index gives a view of the price trend in general and thus helps to guard the rent against inflation.

Index stipulation and index increases

A lease of residence stipulates to which index the rent is tied and the time the rent will be checked (increased). Usually, rent is increased only once a year. In the agreements made by Vuokraturva, the date of increase is usually the same date each year as the date the agreement was signed. The checking index is the last published index figure and the base index is the last published index figure at the time of signing the lease. By comparing these two figures, we get the amount of rent increase possible. More information about the consumer price index and the index figures is available from Statistics Finland at www.tilastokeskus.fi and by telephone (09) 1734 3402.

Remember to notify the tenant in writing before putting the increase into effect!

Taxation of rent income

Rent income is taxed according to the percentage for income from capital, which is currently 28%. Earned income or income from capital does not affect the percentage at which rent income is taxed.

There are certain allowances to income from capital that have to do with acquiring the income. It is possible to deduct agent commissions, interest on apartment and student loans, maintenance fees, repair work that is needed to maintain the current condition of an apartment, the repair and renewal of household equipment, and membership fees to Suomen Vuokranantajat ry from the rent income.

The rent income left after the deductions is taxed at the percentage of income from capital. If there is no income after the deductions, no tax is paid. If the deductions are greater than the income, you have an income deficit from capital. This deficit can be noted as compensation for earned income tax. Another possibility is that the deficit is confirmed as a loss of income from capital, in which case you can deduct the amount from income on capital for the coming years. However, the deductions must be made in full during the next ten-year period of taxation.

It is also worth gold to know that in some cases, the basic repair work in an apartment can be deducted from rent income taxation. Even basic renovations can sometimes be deducted during the time of effect of the expense. The deductions must be made evenly and over the course of ten years at the most.

Ordering a free guide to renting

If you would like more information about renting, you can order a free guide from us either by calling (09) 6877 550 or by sending an email to asiakaspalvelu@vuokraturva.fi