Fair rental practices are meant to assist with creating, running, and ending a trouble-free lease. Fair rental practices guide is a collaboration of industry organizations, and it was last updated in 2018. Fair rental practices are recommended for residential leases especially if the parties have not agreed anything on possible upcoming issues and the law does not state anything specific on a certain issue. However, if the parties have agreed on practices regarding the lease, they are followed according to the agreement.
In apartment lease agreements, trust between the parties plays a significant role. The landlord gives possession of his/her apartment to another person and the tenant makes a home in the leased apartment. The longevity of the lease and possible unexpected changes underline the loyalty and openness obligation the parties have to each other. Below is a summary of the recommendations in our Fair rental practices. The full guide is available via the link at the bottom.
Openness and interaction
Renting operates according to the rules of fair play, and the procedures take the views of both contracting parties into consideration. Any special terms (such as a smoking ban, responsibility for maintenance) must be clearly indicated in the rental advertisement or when the apartment is offered. Contact between the contracting parties is an important factor in lease management. To facilitate their interaction, the parties shall ensure that their contact information remains up to date throughout the lease period.
The tenant’s main obligation is to pay the agreed rent in full on the due date, at the latest. Fair rental practices oblige the tenant to inform the landlord of any rent payment difficulties immediately.
Signing of a lease agreement
A lease agreement is the single most important document of a lease. The agreement must be written in a clear manner. Both parties must be fully aware of what has been agreed.
Fair rental practices require that a lease agreement is always made in writing. A lease agreement drafted in electronic format is also regarded as being a written agreement if it cannot be altered unilaterally and it remains available to both parties. If the terms of the lease need to be changed through a joint agreement, any changes must be made in writing, for example, in a separate appendix.
When signing an agreement, both parties must reliably verify their identity. The landlord must substantiate their right for the apartment to be let. The landlord has the right to check the tenant’s credit information.
Security provided by the tenant ensures payment of rent, proper care of the apartment, and other responsibilities related to the lease. For reasons of clarity, it is advisable to indicate in the lease agreement that security is provided to ensure the fulfilment of all the obligations associated with the agreement.
From the security deposit, only such reasonable costs can be withheld that the landlord has actually incurred on account neglect by the tenant. The tenant must be notified of the withholding of security and reasons for it in writing. The tenant must also receive a written list of the costs incurred. If there is no justification for using the security deposit, it shall be returned in full without delay as soon as the lease has ended.
The rent is determined according to what has been agreed between the landlord and the tenant. According to legislation, rent can be increased on the basis of the agreement only if an applicable provision has been included in the lease agreement.
In rent increase provisions where only the landlord is able to calculate the rent increase amount, the tenant must always be informed in writing of the new rent and the date it takes effect. According to fair rental practices, the landlord should notify the tenant of such an increase well in advance even though the date of increase was entered into the agreement.
If rent is to be increased based on other grounds than those outlined in the agreement, a separate agreement must be made with the tenant. Fair rental practices describe a procedure for so called level increases where the increase has not been agreed on or the rent is not at the level of the current rental market in the area.
It is always advisable for a tenant to purchase home insurance, regardless of whether the landlord requires it in the terms of agreement. Home insurance, including legal protection and liability insurance, purchased by a tenant should be considered part of the cost of living.
Upkeep of rented premises
According to legislation, the tenant is obligated to take good care of the leased premises and any equipment and furniture. If the tenant detects a defect in the apartment that may lead to damage, he/she they must take any necessary action to prevent the damage from happening. This may require protective measures or a notification to an authority, a representative of the housing company or the landlord.
The tenant is entitled to a reasonable rent reduction for the time the apartment has been in deficient condition unless the tenant has caused the damage to the apartment. If the apartment is uninhabitable, the tenant is not obligated to pay rent, unless the apartment and any associated storage spaces are used for storing the tenant’s personal property. Under such circumstances, the tenant is obligated to pay a rent known as storage rent.
Renovations performed by the tenant
According to legislation, the tenant is not entitled to perform alteration or repair work on rented premises without permission from the landlord. Such work includes painting, wallpapering, and removing and replacing fixtures. If the tenant receives permission to do alteration work in the apartment, the compensation paid for possible work and materials must be agreed upon in writing in advance.
The tenant is obliged to allow the landlord to check the alteration or repair work on an agreed date. The time of paying compensation to the tenant must also be agreed on, and particular attention should be paid to how the alteration or repair work will be carried out (schedule, materials, supervisors, the required quality, who carries out the work).
Visiting the apartment
According to legislation, visits to the apartment must always be agreed upon with the tenant. An example of an acceptable method is a visit notification that requests the tenant to contact the landlord if the proposed visit time is unsuitable. Such notices must always include the visitor’s contact information, the reason for the visit, and its estimated duration. It should be noted that a general notice of renovation of the property is no substitute to an agreement on visiting the apartment.
The time of the visit must be indicated as precisely and accurately as possible in the visit notification so that the tenant experiences as little inconvenience as possible in terms of, for example, arranging work or pet care. The tenant must leave the security lock open at the time of the visit so that the landlord can enter the apartment with the master key. The tenant must ensure that the visitor has safe entrance to the apartment at the agreed time.
Ending a lease
The most common way to end a lease is terminating it. This means that the lease ends after a period of notice. According to legislation, the period of notice starts on the last day of the month the notice of termination was received, unless otherwise agreed.
A fixed-term lease agreement is binding and cannot, as a general rule, be terminated. However, a court may authorize the tenant or the landlord to terminate a fixed-term lease agreement on special grounds. Should such grounds be present, the tenant and the landlord are primarily recommended to make an agreement on the issue.
In addition to terminating a lease agreement , the lease can end by one of the parties rescinding it. Rescission is possible under circumstances where a party has significantly breached against the contract. The agreement may be rescinded only provided there are legal grounds for the rescission.
The apartment and other spaces associated with the lease must be handed over vacated and cleaned after the lease is terminated. The apartment, cabinets, floors and surfaces must be swept clean, and garbage must have been taken away. Washing windows and ceilings is not automatically a part of normal final cleanup. It is a good idea to agree on the level of the final cleaning at the beginning of the lease, and the tenant should be given written instructions regarding the level of the cleaning.
According to legislation, move-out day is the first business day after the day of terminating the lease agreement. Thus, if the agreement ends on a Friday, the move-out day is the following Monday. If the Monday is a holiday, the move-out day is Tuesday. On move-out day, the tenant must give possession of half of the apartment to the landlord. On the day after the move-out day, the tenant must hand over the entire apartment, empty and cleaned, and the keys to the landlord. Other spaces that have been used on the basis of the lease must also be emptied out.
However, the lease agreement may include a condition that differs from the above. You may agree that the move-out day is e.g. the last day of the agreement, in which case the apartment must be completely cleaned and handed over to the landlord the same day.