Differences between living as a tenant being a tenant-owner
There are differences between living in a rental apartment and being a tenant-owner. In the first case, you rent your home from a landlord who owns and manages the building. As a tenant-owner, you are a member in the tenant owned cooperative housing association that owns and manages the building.
Living in a rental apartment
The property is owned by the landlord. The landlord takes care of managing the property on a day-by-day basis, and this service is included in your rent. You don’t pay any equity deposit to get your apartment – only your rent each month.
When you live in a rental apartment, the landlord decides what alterations may be made to the apartment. The landlord takes care of the management of the property, and if, for example, your stove breaks, the landlord is the one who is responsible for repairing or replacing it. You can influence the maintenance of the property through the local branch of the Swedish Union of Tenants.
A rented apartment cannot be purchased, sold or gifted, but it can be assigned and exchanged subject to the conditions stated in the Rental Act (hyreslagen).
Tenants of the three municipal housing companies in Stockholm have access to the joint internal queue for finding another apartment, if one becomes available.
Living in an owner-occupied apartment
When you live in an owner-occupied apartment, the tenant owned cooperative housing association owns the property and leases it to its members as tenant-owners. As a member, you pay an equity deposit to the association for your owner-occupied apartment.
Owning an owner-occupied apartment gives you a great deal of freedom in arranging your home, and you are the one who decides on most of the alterations and the materials used in the apartment. The members of a tenant owned cooperative housing association together decide about the building’s common areas, such as the laundry room and courtyard, and the association is responsible for repairing anything that breaks outside of the apartments, as well as for any renovations the property requires.
The tenant owned cooperative housing association chooses how it wishes to manage and maintain the property. This can concern the cleaning and maintenance of outdoor areas, for example. The association can either have the residents do the work, or it may retain a contractor.
The members pay a monthly service fee to the association. The association and its operations are governed, inter alia, by the Tenant Ownership Act (bostadsrättslagen) and the by-laws for the association. Most people who purchase owner-occupied apartments need to borrow money from a bank or a lending institution. In that case, you will be responsible not only from the monthly service fee to the association, but also for paying the interest and amortization on your housing loan.
An owner-occupied apartment has an economic value that can increase or decrease. This means that unlike a rented apartment, an owner-occupied apartment can be sold, gifted or inherited.