Tenants' Influence Over Refurbishments is Strengthened - International Law Office

The government has proposed new legislation increasing tenants' influence over refurbishments and alterations. The changes apply to both residential and commercial leases.

Under the current law a landlord wishing to refurbish or alter a building to such an extent that 'usage value' (ie, its value to the tenant, depending on age, standard and other factors) is affected must obtain permission from the tenants involved. If the refurbishments or alterations involve areas used by all tenants, permission is necessary from a majority of the tenants. If the tenants do not give permission, the landlord may seek permission from the Rental Court. The court will permit the refurbishments and alterations if the landlord has good reason for his or her plans and it is not unreasonable in relation to the tenants. The decision as to whether proposed changes are unreasonable for the tenants will take into consideration the tenants' interests.

The changes proposed include a new definition of what is 'unreasonable' in relation to the tenants. A survey conducted on how the present legislation has been applied demonstrates that refurbishments that modernize old buildings to today's standards have always been accepted by the Rental Court. However, in some renovation cases the tenants may be better served by a slightly more out-dated standard. The Rental Court will therefore need to take into consideration tenants' varying interests in deciding whether to permit refurbishment.

Further, the present set of rules only allows the Rental Court to prohibit refurbishments and alterations, but does not include any sanctions against refurbishments and alterations undertaken without permission. It is now proposed that such refurbishments and alterations should not be taken into account when deciding rent in situations of conflict between the landlord and tenant. In effect, this means that the landlord cannot bill the tenant for the costs of refurbishments and alterations undertaken without due permission.

For further information on this topic please contact Johan Hessius or Magnus G Graner at Advokatfirman Lindahl by telephone (+46 8 670 58 00) or by fax (+46 8 667 73 80) or by email (johan.hessius@lindahl.se or magnus.graner@lindahl.se).