Finland Residential Tenancy Act: Overview for Landlords
A comprehensive overview of the Act on Residential Leases (AHVL) in Finland. Learn about free rent setting, notice periods, and security deposit maximums.
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The rental of residential apartments in Finland is primarily governed by the Act on Residential Leases (Laki asuinhuoneiston vuokrauksesta, AHVL). The law is largely mandatory (to protect the tenant), meaning that the law cannot be deviated from to the detriment of the tenant even by mutual agreement, unless the law explicitly permits it. The law balances the rights of the parties but gives significant protection to the tenant's right to housing.
Key Rules in a Nutshell
Free Rent Setting and Increases
Unlike many other Nordic countries (such as Sweden and Denmark), Finland abandoned rent control in the private housing market in the early 1990s. Therefore, freedom of contract dictates the rent amount in Finland today. The initial rent can be set freely according to the market situation.
- Rent Increases: In order to increase the rent during the tenancy without separate negotiations, the basis for the increase (e.g., cost-of-living index, flat increase, or percentage increase) must be clearly agreed upon in the lease agreement.
- Reasonableness: Although the rent is freely negotiable, it must still be "reasonable" and must not significantly exceed the fair rental level of comparable apartments in the area. A tenant can take an unreasonable rent to a court or the Consumer Disputes Board for review.
Read more: Rent Increases in Finland.
Notice Periods and Contract Types
In Finland, lease agreements can be made either valid until further notice (continuous) or for a fixed term.
Valid Until Further Notice (Continuous)
- Tenant's notice period: Always 1 calendar month. The notice period is calculated from the last day of the calendar month during which the notice was given. Example: If you give notice on March 15th, the contract ends on April 30th.
- Landlord's notice period: Depends on the duration of the tenancy. If the contract has lasted less than one year, the notice period is 3 months. If the contract has continued for over a year, the time is 6 months. There must be a proper and permissible reason for termination (e.g., sale of the apartment or taking it into personal use).
Fixed-Term Contract
A fixed-term contract cannot generally be terminated in the middle of the contract period; it ends automatically on the pre-agreed date. A court may, for a particularly weighty reason (such as illness or moving to another city for work), entitle the tenant or landlord to terminate a fixed-term contract.
Security Deposit (Vuokravakuus)
The landlord has the right to demand a deposit from the tenant in case of damage, unpaid rent, or failure to fulfill other contractual obligations. The deposit may be a maximum amount equivalent to three (3) months' rent. The most common practice is to require a deposit equivalent to 1-2 months' rent. The deposit must be returned to the tenant without delay after the end of the tenancy if they have met all their obligations.
Read more: Security Deposits in Finland.
2026 Update: As of February 2026, the Social Insurance Institution of Finland (Kela) has revised its housing allowance disbursement. For tenants receiving social assistance where a rental deposit has been provided, Kela now pays the rent support directly to the landlord's account to minimize arrears risks.
Cancellation of Lease (Eviction)
A lease agreement can be cancelled (meaning it ends immediately without a notice period) if the other party fundamentally breaches the contract. The landlord has the right to cancel in cases such as:
- Failure to pay rent (usually 2-3 months of rent in arrears).
- Unauthorized transfer of the apartment to another's use.
- Poor care of the apartment or leading a disturbing life (requires a warning in advance).
If the tenant refuses to move after the cancellation, the landlord will have to apply for an eviction order (häätötuomio) from the district court.
Read more: Eviction Process and Cancellation.
Explore more Finland compliance guides:
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