Introduction

Contracts and relationships between landlords and tenants are strongly regulated Swedish law. The applicable law contains mandatory rules which cannot be contracted away and which, in the case a rental contract contains terms which do not follow or provide less than the mandatory rules, will be without binding effect.

A party who leases to another is referred to as the landlord or lessor while the person who leases from the landlord is referred to as the tenant or lessee.

Generally, landlord tenant law and contracts between landlords and tenants are governed in Sweden by the Land Code which covers the lease of a building or a part thereof, in exchange for payment. Land can also be included in such a lease if it it is rented with the building, or part thereof, and is for insignificant gardening or other purpose that is not agricultural.

Landlords can be commercial or non-commercial in that they rent out a commercial premises as a trader or  private premises as a private person. Where a landlord is renting out premises covered by the above definition but is doing so as a non-commercial actor, the the rules set out in the Act on Renting Private Residential premises apply. The Land Code will apply for these leasesonly if specific rules are not set out in the Act on Renting Private Residential premises.

For the purpose of this text we will focus on landlord tenant law and contracts where the landlord is commercial. Further, we will focus only on first hand leases and not subletting.

Residential and non-residential leases

The Land Code distinguishes between leases for residential purposes and leases for non-residential purposes. A residential premises is a premises used entirely or partially as a residence. A non-residential premises is a premises used for purposes other than residential such as for commercial use or recreational use.

For the remainder of this text, we will go though some key characteristics and rules applicable to residential and non-residential leases between commercial landlords and tenants.

Residential & non-residential leases

Rental contract

There are no format requirements for a rental contract to be considered binding and enforceable. A rental contract for a residential lease is however required to be in writing at the request of the landlord or the tenant.

While it is possible for a rental contract for a residential lease to be made orally, we recommend that rental contracts are made in writing to ensure clarity for both the landlord and the tenant.

Duration

Rental contracts for residential and non-residential premises can be for a fixed period of time or until further notice, i.e. for an indefinite period of time. If a rental contract contains a fixed time period, the rental contract will end once the period has passed - subject to the exception stated in the next section. If a rental contract does not contain a fixed time period it is considered to be for an undefined period of time and must be terminated in order for the rental contract to come to an end.

Termination

Rental contracts valid for an indefinite period must be terminated in order to expire.

Rental contracts valid for a fixed period will expire at the end of the period, unless otherwise agreed.

If a tenancy has lasted more than nine months in a row, however, a rental contract must always be terminated in order to expire.

A rental contract for a fixed period will be extended for an indefinite period of time if

- the contract does not say anything about the effect of a non-termination and the agreement is not terminated within the period stipulated in the agreement, or

- the tenant, despite termination, continues to use the premises 1 month after the end of the lease without the landlord requesting the tenant to leave the premises.

The length of the notice period for termination can be agreed upon and set out in a rental contract. If this is not done, the law sets out the applicable time frames which are progressively longer the longer the term of the rental contract.

Residential tenants may always give 3 months notice of termination.

Notice of termination must be in writing if the lease has been for more than 3 consecutive months. It can also be given orally by the tenant if the rental contract has been for less than 3 months and the landlord provides confirmation of it in writing. A landlord however must provide notice in writing.

Price

Residential tenants

The price for renting a residential premises should be stated in the rental contract.The rental price can in some cases, but not always, be exclusive of costs for heating, hot water, electricity etc.

Non-residential tenants

The price for renting a non-residential premises should be set out in the rental contract to the extent that it doesn’t include costs for heating, hot water, electricity, etc. Agreements for rental of non-residential premsies can also have a price based on the non-residential tenant’s revenue or as per an agreement between the landlord or a landlord and an organisation of property unit owners which the landlord is a member of and an organisation of tenants. For non-residential rental contracts for a fixed period of more than 3 years, rental prices can also be index based or based on other grounds.

Loss of tenancy

A tenant can for example loose the right to rent the premises where

• The residential tenant is more than 1 week late in paying rent and no outstanding decisions with the rental tribunal are underway ,
• The non-residential tenant is more than 2 working days late in paying rent,
• A residential or non-residentual tenant assigns the tenancy without permission or needed consent and does not after being requested to, apply for permission or correct the action
• The premises are being used for a purpose other than that agreed upon or by someone not permitted