Apartment - shares in a housing company
Finnish apartments are almost always owned and managed through a housing company structure (finnish: asunto-osakeyhtiö), governed by its own dedicated legislation. Instead of directly owning the apartment, an owner holds shares in the housing company. These shares correspond to a specific apartment and grant the right to possess and use it.
This system provides several advantages. The housing company handles decisions regarding necessary renovations, which are approved during shareholders’ meetings. Additionally, it collects a maintenance fee (yhtiövastike) to cover communal expenses, including heating, cleaning, trash disposal, and property taxes.
Larger housing companies are typically professionally managed, offering greater transparency and smoother operations, which benefits both current owners and potential buyers. On the other hand, smaller housing companies are sometimes managed directly by the shareholders to reduce operating costs. While this approach can save money, it can result improper management.
The buyer can claim compensation for a hidden defect within two years of the purchase, but the claim must be made within a reasonable time after the defect is discovered.
Inspections on multistory apartment buildings are rarely conducted in Finland unless there are specific concerns about the condition of the unit itself. This is because the responsibility for maintaining the building's structure, shared facilities, and common areas lies with the housing company, not individual apartment owners.
Instead, buyers typically rely on:
Financial statements and maintenance records of the housing company to assess the building's condition.
A review of upcoming renovation plans and past repair history, which are disclosed by the housing company during the sale process.
Housing companies in Finland can either own or rent the land on which their buildings are located. Some housing companies have a mixed model (valinnainen vuokratontti) where shareholders have the option to redeem their share of the plot or pay monthly land lease fee.
Even informal offers on apartments in Finland are legally binding, meaning that once an offer is accepted, both the buyer and the seller are obligated to complete the transaction. If either party refuses to finalize the sale after an offer has been accepted, there is typically a 4 % breach of contract penalty based on the agreed sale price.
In Finland, the buyer is responsible for paying an asset transfer tax of 1.5% of the apartment's sales price. This tax must be paid before the ownership can be officially registered. The inclusion of the debt share means that the tax is calculated based on the total financial commitment, not just the purchase price.
In Finland, lawyers or officials are not required for the property transaction process. Typically, the real estate agent drafts the sales contract, ensuring it includes all necessary details and the bank financing the transaction oversees the process, ensuring that the purchase price is paid, and facilitates the transfer of ownership.
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