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This is the third part. The first was about the cooperative apartment (bostadsrätt), the second about houses (hus) and the ägarlägenhet. Both dealt with finished homes that already exist. This part is about new-build housing (nyproduktion), that is, homes that are still being built or have just been built and are sold for the first time. They are often bought "off plan" (på ritning), when the apartment does not yet physically exist.
New-build housing has its advantages: a new home, low running costs in the first years, and a fixed price with no bidding. But it also carries particular risks and a different legal structure than buying a finished home.
Money and the lånelöfte (mortgage promise) work the same way as in the first part, with two additions. First, there is no bidding (budgivning) here; the price is fixed. Second, the developer (byggherre) usually requires you to have a valid lånelöfte when the contract is signed. Since two years or more can pass between contract and moving in, the bank's preliminary decision may expire and then have to be renewed.
The most important thing: your counterparty is the cooperative, not the building company
When buying a new-build apartment, your counterparty, and your opposing party in any dispute, is the housing cooperative (bostadsrättsförening), not the company that built the building (byggföretag). So claims concerning the apartment are directed at the cooperative, not at the builder.
When buying new-build housing, three different contracts are usually signed.
Booking agreement (bokningsavtal, also called reservationsavtal or intresseanmälan). This is a way for the developer to gauge demand. This type of contract is not regulated by law, there are no formal requirements, and it is usually not binding. The booking fee (bokningsavgift) is normally between 10,000 and 25,000 kronor and is later deducted from the price. But read it carefully: there are versions on the market where you can lose significant sums if you back out.
Preliminary agreement (förhandsavtal). This is regulated by the Housing Cooperative Act (bostadsrättslagen), is binding, and is signed with the cooperative before the apartment is finished. The cooperative promises to grant you the apartment when it is built, and you promise to buy it. The agreement must be in writing and contain, among other things, the parties' names, which apartment will be granted, the estimated time of the grant, the estimated fees and the size of the advance payment (förskott), and details of the building's building permit (bygglov). Before you sign, you have at least seven days to consider (betänketid). Membership in the cooperative (medlemskap) is also tested in connection with the preliminary agreement, and once it is signed the cooperative cannot withdraw that decision.
An important difference from the first part. When buying a finished apartment there is no separate preliminary agreement; there, the transfer agreement (överlåtelseavtal) is the central one. With new-build housing, the förhandsavtal is often the first binding step, and it binds you for a long time.
The advance payment and its security. Along with the preliminary agreement you usually pay an advance (förskott), often around 100,000 kronor, sometimes more, and in some cases up to the full down payment (insats). The cooperative may only take an advance if the Swedish Companies Registration Office (Bolagsverket) has given permission, and that permission requires a certified cost estimate and that the cooperative has provided security for repayment. So if the build does not happen, the advance must be repaid. But bear in mind that the security only covers the advance itself, not options (tillval) you have paid for separately.
Grant agreement (upplåtelseavtal). This is the final contract, signed at the end of construction or when the apartment is ready. Before it is signed, the cooperative's financial plan (ekonomisk plan) must be reviewed, certified by two certifiers (intygsgivare) and registered with Bolagsverket. For the contract to be valid, your membership must also be approved. Along with it you usually pay a deposit (handpenning) of about 10 percent of the price, less any booking and advance already paid. Once the grant agreement is signed, the apartment can be resold even before you get the keys, which is what "selling off plan" means.
Because the förhandsavtal is binding, simply backing out costs money. But the Housing Cooperative Act sets out three cases where you can cancel it without consequences:
In other cases, on cancelling you must compensate the cooperative's additional costs and any loss: costs for advertising and viewings, the difference between what a new buyer pays and what you would have paid, and unpaid fees. Your liability is not limited to the size of the advance; it may be greater. A preliminary agreement can only be transferred (överlåta) to a spouse or a cohabiting partner.
With new-build housing there is no annual report (årsredovisning), because the cooperative is new. Instead you read two documents. The cost estimate (kostnadskalkyl) is a shorter, preliminary document for the preliminary agreement, certified by two certifiers but not registered with Bolagsverket. The financial plan (ekonomisk plan) is a more detailed document for the grant agreement, which is certified and registered with Bolagsverket, and it is there that the cooperative's loans, running costs and calculated annual fees (årsavgift) appear.
Both the estimate and the plan are only a forecast. So look at what interest rate has been assumed and at the ratio between the cooperative's loans and the members' contributions. Cooperatives with a smaller share of loans are usually more stable.
The main financial risk with new-build housing is the cooperative's high debt per square metre (belåning per kvadratmeter), covered in the first part. New cooperatives often have debt of around 10,000–15,000 kronor per square metre, and above that level the risk rises noticeably. Different sources give different thresholds, so this is only a guide. The higher the debt, the more sensitive the cooperative is to an interest-rate rise: if the rate goes up, so does the monthly fee.
So ask for an interest-rate sensitivity analysis: what would the annual fee look like if the rate rose to 4 or 5 percent? Also be wary of low fees in the first year or two, which may be followed by sharp increases. A low "teaser" fee at the start is a warning rather than an advantage.
Since you pay for the apartment before it is finished, the developer's finances matter. If a smaller subcontractor goes bankrupt it rarely affects your apartment, because the developer replaces them. It is worse if the developer itself runs into trouble, because then you risk being left with money you have paid and a half-finished building. Construction bankruptcies have not been uncommon in Sweden in recent years, so it is worth checking the developer thoroughly. You can, among other things, look at the latest annual reports on allabolag.se or at Bolagsverket and note the equity ratio (soliditet), cash flow and profit trend.
Two guarantees help here. An advance-payment guarantee (förskottsgaranti, sometimes called insatsgaranti) protects your advance if the build does not happen, but covers only the advance, not options. A completion guarantee (färdigställandeskydd) ensures the project is completed even if the developer goes bankrupt. For a new-build house (villa) built under a construction contract, such protection is normally required by law, whereas for a new-build bostadsrätt it is not a legal requirement, though it is wise to ask for.
A new-build being delayed is the rule rather than the exception. The preliminary agreement usually states a preliminary completion date (preliminär tillträdesdag), and the developer has the right to postpone it for a certain time without consequences. In practice, delays of a year or two occur. It is therefore risky to sell your current home counting on moving into the new-build on the same date. Have an alternative housing solution ready.
The right to cancel the agreement over a delay exists, but only if the delay is unreasonably long, and the law sets no clear limit, so it is often decided in court. It is therefore worth insisting on a penalty clause for delay (vitesklausul) in the agreement.
The cooperative is formed by the developer, and the first board (the so-called byggande styrelse, the "building board") is appointed by them, sometimes with their own people. Read the statutes (stadgar) and see whether there are odd voting rules and how the board is appointed. It happens that the developer keeps control of the board for several years after moving in, and then decisions on maintenance, fee increases and investments are made in the developer's interest rather than the residents'. It is good if the statutes provide that the board must be resident-representative within about two years of moving in.
One pointer can be the Trygg BRF quality mark: is the project listed at tryggbostadsrattsmarknad.se? For projects with that mark there are rules on how many board members may have a connection to the developer.
During construction you can often choose materials and options: flooring, kitchen, tiles and so on. It is not compulsory; you get a good home even without them. But two things. First, the options sometimes have to be paid for before completion, so they cannot be financed with the mortgage. Second, the advance-payment guarantee does not cover options, so if the project is cancelled that money is usually lost. If the standard options do not suit you, you can try to agree separately, to avoid replacing the fittings right after moving in.
A few weeks before you get the keys, an independent inspector carries out a final inspection (slutbesiktning). In new-build housing, defects are common, so it is worth engaging your own inspector rather than relying only on the developer's inspection. Later, a two-year inspection (tvåårsbesiktning) is also carried out, at which you can report defects that have appeared during the first two years.
Since your counterparty is the cooperative, you direct claims concerning the apartment to its board. The board must, if possible, remedy the defects; if it does not, you can remedy them yourself and claim compensation, and for significant defects it may become possible to cancel the contract or get a reduction in the annual fee. The estate agent may also be liable if, in the listing or the property description, they gave information that later proved incorrect.
An estate agent may not be employed by the building company, because that calls their impartiality into question, and if the agent takes a job as a salesperson they lose their registration. The developer may instead sell the homes through its own salespeople who are not registered agents. The agent must, among other things, check that there is a certified cost estimate and that Bolagsverket has given permission to take advances and to grant the apartments. The estate agent's role in new-build housing is explained well by Fastighetsmäklarinspektionen (the Swedish Estate Agents Inspectorate).
If it is not an apartment but a new house, the process is different and closer to the second part. Here you buy the plot and sign a construction contract (entreprenadavtal) with the builder; the build is often financed with a construction credit (byggnadskreditiv); finally a final inspection is carried out, the municipality issues a final approval (slutbesked), and only then does completion take place. Title registration (lagfart) and other costs for real property were described in the second part.
Before the preliminary or grant agreement, you should understand that your counterparty is the cooperative, not the developer; read the agreement itself carefully, especially the terms on the advance, delay and cancellation; make sure there is a certified cost estimate or financial plan and Bolagsverket's permission for the advance; check the advance-payment guarantee and, for a house, the completion guarantee; assess the cooperative's debt per square metre and its interest-rate sensitivity; if possible, review the developer's finances; and plan alternative housing in case the build is delayed.
And the main rule is the same as in the previous parts: do not sign a document whose content you do not understand.
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Author: Julia Dangoor
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