Which housing difficulties entitle the tenant to a rent reduction, and what is the landlord's view on this? To what extent does the landlord determine the realisation and amount of the rent reduction? Do the recommendations of the Consumer Disputes Board have to be followed and is it worth taking legal action in case of disagreement?
A rent rebate is compensation for the period of housing damage, i.e. when the rented accommodation is not in the condition required by the contract or by law. It is the tenant's right under the law and the landlord's obligation to give it. However, the realisation and amount of the rent reduction is still a grey area, which it is essential to identify in order to protect your interests.
There are not many, even implicit, references to rent reduction in the law. Therefore, we interpreted the rent reduction in a clear form of application of the law and practice. We list the grounds for a rent reduction, and discuss the resolution of disputes between landlord and tenant, with examples from the Consumer Disputes Tribunal.
Act 481/1995 on the renting of residential apartments defines the tenant's right to a rent reduction. The landlord's obligation to grant a rent reduction and the amount of the reduction are mainly based on the law and the lease. The law and its interpretation are formulated in this section as either the landlord's or the tenant's obligations, in order to avoid, for example, repeating the landlord's obligations as tenant's rights. Landlord's obligations
In relation to the rent reduction, the landlord is obliged to:
Article 23 on the obligations of the landlord is confusing for many as the only article that refers to a reduction or exemption from payment of rent when the dwelling is in a state of disrepair or even uninhabitable.
In summary: The landlord must keep the apartment in the agreed condition and ensure that no work causes unnecessary inconvenience to the tenant. He is obliged to give timely notice of planned works and to grant a reduction in rent for any substantial damage to the dwelling, unless it is due to the tenant's own negligence.
The tenant's obligations include:
In summary: The tenant must allow the landlord access to the property for inspection and must immediately report any defects and deficiencies and, if a rent reduction is required, document them. If the defects and deficiencies, or the failure to report them, result in a housing handicap, the tenant is not entitled to a rent reduction for the duration of the handicap.
The conditions agreed in the rental contract determine the condition of the dwelling, the level of equipment and other essential aspects at the start of the tenancy. Any subsequent defects or disturbances, i.e. housing problems, are compared with the conditions and the law.
If the dwelling's usability deteriorates significantly compared to what was agreed in the contract, the tenant has the right to demand that the rent be reduced to reflect the actual usability of the dwelling. For example, the tenancy agreement provides for a certain temperature, but there is a persistent, verifiably lower indoor temperature in the dwelling.
Based on the legislation and a case-by-case analysis, a reasonable rent reduction is determined according to the extent to which the dwelling has become less usable.
The criteria for rent reduction can be divided into the following categories:
The landlord has the right to try to remedy the situation from the moment he receives the notice before he is obliged to give a rent reduction.
Plumbing repairs typically cause the most damage to housing of all.
Façade renovation is the most common type of external disturbance that affects the dwelling.
Elevator renovation is generally less inconvenient, but its impact is clear and therefore commonly replaced.
Kitchen renovation: justified, as it directly affects everyday living comfort, especially cooking.
Bathroom renovation: justified if the use of the toilet or shower is restricted, not in the case of surface renovation
Balcony renovation: generally speaking, justified.
Full exemption from paying rent due to renovation is possible only if the property cannot be used at all. For example, in the event of water damage or extensive plumbing repairs, where the dwelling is completely unusable. The rent exemption depends on the duration of the renovation. A few days of inactivity entitle the tenant to an equivalent period of rent-free use
If repairs or other circumstances make the rental property uninhabitable, the landlord should try to arrange a replacement, in line with good tenancy practice. However, the law does not oblige them to provide replacement accommodation. This means that the situation is flexible: the landlord can offer a replacement dwelling, but the tenant can make his or her own decision whether to accept it.
There are a number of options for temporary accommodation, such as short-term rental accommodation, hotel rooms or other temporary accommodation that can be offered by the landlord or property management after negotiation. For example, if a plumbing repair is imminent and the use of the dwelling is significantly disrupted, the landlord may offer the tenant temporary accommodation.
At Immodan, we have furnished and fully equipped temporary homes for short or longer stays. Our apartments are carefully equipped with appliances, kitchen utensils and appliances. Get on with your daily life without worrying about missing amenities and find out more. Immodan foster homes.
Cold housing: if your home stays too cool, i.e. falls below 18°C, your comfort will be reduced and health risks may increase. Many tenancy guidelines stress that persistent coldness entitles the tenant to claim a rent reduction. As an example of the amount of the discount, in Helsinki city apartments the estimated discount percentage is 10-15% of the rent, depending on the duration of the disturbance and other conditions in the apartment.
A hot home: indoor temperatures above 32°C can also reduce the usability of your home and cause health problems, especially in summer. In this case, the tenant can claim a rent reduction for the days when the temperature in the dwelling is mostly above this limit. According to the Finnish Tenants' Association, the reduction percentage is around 10-20% of the rent.
The following also qualify for a rent reduction, but they must be measurably significant.
Ideally, the landlord and tenant will reach an agreement on the housing problem based on a brief explanation and/or a couple of pictures. Sometimes more thorough evidence is needed to establish that the housing disadvantage is sufficient to justify a rent reduction and the amount of the rent reduction requested.
If there is a dispute about a rent reduction even after proof has been provided, the parties can turn to the Consumer Disputes Board, whose role is well known. The panel will assess the reasonableness of the rent and the actual usability of the dwelling, and make recommendations on the rent at which the contractual relationship should continue in times of disturbance.
The Consumer Disputes Board can therefore provide additional clarity and objective assessment in situations where negotiations between the parties do not lead to a common solution on the rent reduction. This process helps the parties to ensure that the rent remains reasonable in line with the actual utility of the dwelling.
If there is a dispute about the rent reduction even after the evidence has been presented, the parties can refer the matter to the Consumer Disputes Board. The panel will assess the reasonableness of the rent and the actual usability of the dwelling, and make recommendations on the rent at which the contractual relationship should continue during periods of disturbance.
The Consumer Disputes Board can therefore provide additional clarity and objective assessment in situations where negotiations between the parties do not lead to a common solution on the rent reduction.
Case 1: The tenant received a refusal decision
Landlord's bathroom renovation caused significant inconvenience to tenants, as the bathroom was completely unusable for about 1.5 months during the renovation. As a result, tenants had to store their belongings in the hallway, there was extra noise, temperatures rose considerably and the toilet/shower facilities provided in other rooms were very far away.
The tenants were refunded 70% of the rent for a short week due to the lack of a shower, 40% for about a week when an outside toilet and shower were used, and 5% for the entire renovation due to the fact that toiletries had to be stored in the hallway.
The tenants are demanding a refund of two months' rent for the entire renovation, as they claim that the previous refund of around €700 was not enough to cover the damage caused.
However, the landlord had taken appropriate measures to minimise the situation: the tenants were offered a replacement apartment and temporary toilet/shower facilities were provided during the renovation. The Board considered that the landlord's actions were in accordance with the law and good building practice and no further compensation was required.
Case 2: The tenant received a positive decision
One room in the apartment was completely unusable due to a water leak in the roof, for which the tenant claimed an additional compensation of EUR 2 083,07 in the form of a rent reduction for that period. He had already reported the problem in May 2006, but the landlord did not take remedial action until February 2008, when it was discovered that the water leaks were causing persistent dampness, odours and allergic symptoms. The space could only be used for storage, which made it difficult to live there normally.
In addition, the calculation of the compensation was based on the fact that the rent for the 10 m2 area in question should be refunded because the usability of the apartment had been significantly impaired. The tenants argued that the compensation already granted by the landlord did not cover all the disadvantages suffered, as the space was subject to long-term occupancy problems and the tenants had to store their belongings in the hallway, which restricted their mobility.
The Board found that the right to rent reduction was determined by the extent to which the normal use of the dwelling was temporarily disrupted. Although the landlord attempted to minimise the inconvenience by providing a substitute accommodation and temporary toilet/shower facilities, it was found that these measures did not cover the long-term inconvenience experienced by the tenant. The claim for additional compensation was therefore considered justified.
If the landlord does not decide to give a rent reduction after the Consumer Disputes Board's decision, the tenant loses. So, in practice, the party who takes the dispute to court is always the tenant. If the Consumer Disputes Board has sided with the landlord, it is unlikely that the court will rule in favour of the tenant.
Remember that before taking legal action, the tenant must first have documented the problems in the home and reported them in writing to the landlord as soon as possible, and typically have already tried the help of a consumer dispute board. Ultimately, the tenant can take the matter to court, the claim should be brought in good time - before the tenancy ends. Once the tenancy ends, the right to claim a rent reduction usually lapses, and there is no ex post procedure.
It is in the interest of both parties to find a joint solution that maintains the contractual relationship but changes the rent to reflect the actual occupancy of the dwelling for as long as the housing problem persists.
Do you want to find a tenant with whom it is easy to negotiate, for example, rent reductions? Read more on Immodan's page for landlords and rent your property to businesses.
