A lease can be either fixed-term or valid until further notice. A lease that is valid until further notice is a continuous lease that will not end until either the tenant or the landlord terminates it. In a fixed-term lease, the end date of the lease period is determined when the agreement is made. A fixed-term lease can only be terminated before the end date determined in the agreement with the landlord’s consent or a court’s decision, so you should carefully consider signing a long fixed-term lease agreement. The start date, i.e. the effective date of the lease is often the date on which the agreement is signed. From that point on, the agreement is mutually binding. The transfer date of the right of possession is the date on which the tenant receives the keys or is able to move into the apartment.
The rent level is affected by the rents of equivalent apartments in the area as well as factors that decrease or increase the rental value of the apartment. The rent must be paid on the second weekday at the beginning of the rental period (usually a calendar month) unless otherwise agreed. The interest on late payments should comply with the Interest Act. Other costs can include a water rate, a parking space or an Internet connection. Reviewing the rent level, i.e. increasing or decreasing it, must be agreed in the lease agreement. Usually, the rent level is reviewed annually. It may be increased if the maintenance costs increase or the rent is bound to the index.
Periods of notice
A fixed-term lease will end when its period of validity expires. A lease that is valid until further notice will comply with the Act on Residential Leases. The start date of the period of notice will be the last day of the month in which the notice of termination is made. The agreement will remain valid and you must keep paying rent until the end of the period of notice. The legally determined period of notice for a tenant cannot be extended with an agreement, nor can a period of notice for the landlord be shortened. Example: If you submit a notice of termination to the landlord on 15 November, the one-month period of notice will begin on the last day of November, so you will have to pay rent for the entire month of December.
Conditions and rights
The landlord must see to it that the apartment being leased is in inhabitable condition and the equipment is in working order. Before you move in, you should inspect the condition of the apartment together with the landlord. This inspection will prevent a situation where the tenant would have to compensate for damage caused by the previous resident. Usually the landlord will take care of any repairs related to normal living and maintenance based on notifications by the tenant. If the desired arrangement is that the tenant takes care of such matters, it must be agreed separately. The tenant has a right to cancel the lease if using the apartment causes harm to his or her health (such as harm to health caused by mould) or if the landlord fails to take care of necessary repairs. If part of the apartment is uninhabitable due to a pipe renovation, for example, the tenant is entitled to a reduction in rent.
A security deposit (i.e. a rent guarantee, vuokratakuu or vuokravakuus in Finnish) is a deposit requested by the landlord, which is usually paid before receiving the keys to the apartment. It is paid in case that the tenant fails to pay the rent or damages the apartment. The deposit will be paid back to the tenant once the lease has ended, given that everything is in order. Finnish law states that the deposit cannot be greater than the sum of three months’ rent. The security deposit is paid either to an account determined by the landlord or a designated deposit account. Be sure to keep the receipt of your payment!
What matters can be agreed in a lease agreement?
The lease agreement can determine whether or not you are allowed to smoke and keep pets in the apartment. When making a lease agreement, you can also agree that the tenant acquires home insurance for the apartment and commits to maintaining the validity of the insurance. This condition must be entered into the lease agreement as a separate section. Altering the agreement always requires written permission from the landlord.
Tenant’s rights and obligations
The tenant has certain rights defined by law. The landlord must take care of matters such as heating, the functionality of the refrigerator and that the apartment is in good condition. The landlord cannot terminate the lease without a good reason, and the termination must always comply with the legally prescribed periods of notice. The tenant’s obligations include 1) paying the rent on time, 2) taking good care of the apartment and compensating for any damage to it, 3) taking the neighbours into consideration and obeying the rules of the building, 4) notifying the landlord of any faults detected in the apartment.
In some cases the tenant can commit to carrying out maintenance work in the apartment in exchange for a reduction in rent. Such work can be, for example, working as the caretaker, snow clearing or renovations. The lease agreement should always describe the work performance and related conditions. You cannot be forced to agree with unreasonable or inappropriate proposals under any circumstances. At the same time, you should consider whether you are capable of handling the renovation yourself or whether you should leave it to professionals. All electrical work and wet room renovations must be carried out by a professional and approved by the housing company.
Subletting and sublease
Subletting means that the tenant leases the entire apartment to another person. This can only be done with the landlord’s permission. In this case, the lease agreement between the landlord and the original tenant will remain valid alongside the agreement between the original tenant and the new tenant. Subleasing means that the tenant leases only a part of the apartment to another person. The subtenant is responsible for the part of the apartment he or she uses and pays rent for it to the main tenant, who in turn is responsible for the total rent paid to the landlord.
When drawing up a lease agreement (vuokraennakko in Finnish), the parties can agree for a particular reason that the tenant pays the rent in advance. Finnish law states that the forehand rent cannot be greater than the sum of three months’ rent. The forehand rent must be indicated in the lease agreement (sum, payment date and from which rents the advance is recovered). If you are paying forehand rent, negotiate how the rent paid in advance will be taken into account in rent payments during your tenancy.
Advice for lease matters
Questions related to the tenant’s and the landlord’s rights and obligations are commonplace. You can ask tenant associations or state legal aid offices for advice regarding these questions. You can contact Finnish Tenants (Vuokralaiset ry), a national organisation that protects the interests of tenants, for any questions regarding leasing. Counselling tel.: +358 (0)600 9 1515 (€1.92/min + operator charges), on Monday from 9am to 2pm and from 4pm to 6pm, on Tuesday to Friday from 9.30am to 1pm. Membership matters: +358(0)9 477 0360