REAL ESTATE INVESTMENT

Keller Law Firm is your partner every step of the way: from reviewing the property purchase and the first letting to ongoing management and, if applicable, sale.

Are you looking to buy your first property to let? At Keller Law Firm, we can help you with advice on the purchase, letting and subsequent sale.

Purchase

As a buyer of a rental property, you should consider the transaction structure and set goals for price, time and terms of the deal. Then conduct a focused review of the property’s documents, where you will have access to, for example, the land registry and encumbrances, BBR (Building and Housing Register), rental lists and contracts, accounts, maintenance plans and accounts, energy label, insurance policies and any public orders. A solicitor can also assist you with this review. It is important that you clarify the tenancy law issues, including the regulatory regime, rent setting and regulation, improvement increases, maintenance accounts, relocation cases and pending committee or court proceedings.

If you want to buy an entire rental property with several flats, the sale may be subject to an obligation to offer. The obligation to offer applies, among other things, where a property is used exclusively for residential purposes and contains at least six residential flats. The rules also apply to other properties with at least 13 residential apartments and commercial leases. Therefore, you should also be aware that before a rental property with more than this number of units is transferred, it must be offered to the tenants collectively for acquisition on a cooperative basis on the same terms as a third party can obtain. The obligation to offer applies to sales, gifts, mergers, demergers and exchanges, as well as to the transfer of shares/stocks in property companies – but only when a buyer obtains a majority of votes in the company. Successive transfers are also covered.

 

Rental

If you are considering renting out property, or have already invested in your first rental property, there are a number of things you should be aware of. Start by using a proper rental agreement and get all the terms in writing; a rental agreement must be in writing if one of the parties requires it, and using the standard form ensures that the law’s disclosure and authorisation requirements are met.

 

Operation

If you rent out two or more properties, a move-in inspection is mandatory; it must be carried out close to the takeover date, and the move-in report must be handed over at the inspection or sent no later than two weeks after, otherwise the landlord’s claims for wear and tear upon move-out will lapse. The same applies when moving out, where landlords with two or more properties must conduct a move-out inspection no later than two weeks after becoming aware of the move-out, give one week’s written notice and deliver or send the report in a timely manner – otherwise, repair claims under the law lapse, and the absolute complaint deadlines mean that if the deadlines are exceeded, claims cannot be made or offset against the deposit.

When setting the rent after a thorough improvement, the rent may not exceed the value of the rented property; the improvements must be completed within two years and result in a significant increase in value, and adequate documentation is essential in this regard. In addition, the rent may be index-adjusted once a year in accordance with the net price index, if this has been agreed. This adjustment is made by notification from the landlord and cannot be charged retroactively.

In addition to index adjustment, the landlord may – when the conditions of the law are met – demand a separate adjustment as a result of increases in reasonable and necessary expenses. When commencing work, the landlord must give six weeks’ notice if the work does not cause significant inconvenience, and three months’ notice for other work, while urgent repairs may be carried out without notice; the landlord must also have access to the property when circumstances so require. Finally, disputes concerning moving in and out, rent and improvements are often dealt with by the rent tribunals, and it is therefore important to keep systematic documentation in the form of inspection reports, photos, energy labels and expense receipts, as the burden of proof often rests with the landlord.

 

Sale

When selling a rental property, you should determine the structure of the transaction (including price, speed and terms) at an early stage and prepare the necessary documents, including land registry information, BBR (Building and Housing Register), rental lists and contracts, accounts, operating and maintenance plans, energy labels, insurance policies, public orders and information about ongoing cases with tenants. Document the technical condition, possibly through an inspection, and map both maintenance backlogs and planned investments, as these factors affect price and guarantees. Risks must then be balanced through guarantees, limitations of liability, etc. Consideration must be given to how operational matters are handled, e.g. through planned transfers of service and supplier agreements, staff, keys, access, and proper notification of tenants.

In the sales situation, you may again be affected by the obligation to offer. It must then be ensured that there is a condition in the purchase agreement that the obligation to offer must be fulfilled. An offer package must then be prepared for the tenants, which must include, among other things, an identical price, cash payment and other terms and conditions, a copy of the purchase agreement and the ‘usual information’ (land registry, tenancy agreements, accounts, maintenance plan, etc.). The deadline for tenants’ acceptance is at least 10 weeks. The deadline only starts from the time when all relevant information has been received by all tenants.

 

Overall

Renting out property can be a good business, but small mistakes can have big consequences. As solicitors, we ensure that the rental is carried out correctly – so you minimise risk and maximise return.

How Keller Law Firm can help you:

• We can help you with the purchase of the property, including reviewing the property documents before you buy
• We can set up your rental company and advise you on which company form to choose and how to capitalise it
• We can draw up rental contracts, adjustment clauses and special terms
• We can advise on index adjustment, cost increases and major improvements
• We can help you meet deadlines for moving in and out, giving proper notice of work and setting legal rents
• If disputes arise, we can help with rent tribunal cases and any litigation
• If your rental property is to be sold, we can advise you throughout the process

Take the risk out of your rental property with the help of a solicitor who knows the rules and understands the market.

Contact Flemming Keller Hendriksen at +45 70 90 90 60 for a consultation with no obligation and get a tailor-made plan for your property