Purchasing Real Estate in Sweden - Compulsory content of the purchase contract

The purchase contract has to be in writing and

1) identify the real estate,

2) set out the sales price,

3) contain a clear statement of the seller’s intention to sell and

4) be signed by both parties.

A contract that does not meet the formal requirements 1—4 above is void.

If the seller is married, it will most likely be necessary to obtain the spouse’s consent to the sale.

The seller’s, and – if applicable – the spouse’s signatures should be confirmed by two witnesses.

As mentioned in an earlier post, the documentation ordinarily consists of a purchase contract setting out all the provisions of the transaction and a Bill of Purchase confirming the transfer of title and the payment of the full purchase price. Both these documents must fulfil the above requirements with the exception of the signature of the seller’s spouse. Such consent need only be made in the document used for registration purposes.

Finally, it should be noted that there is no Swedish requirement to involve a notary public in connection with a real estate purchase contract. Anyone can draft such a contract and it is normally done by the real estate agent and not a lawyer.

Purchasing Real Estate in Sweden – Normal Content of a Purchase Contract

A normal purchase contract for a private home in Sweden would contain i.a. the following headings:

1. Seller

2. Buyer

3. Real Estate

4. Transfer Date

5. Purchase Price

6. Payment Conditions

7. Debts secured in the real estate

8. Transfer of Risk

9. Insurances

10. Division of real estate income and costs

11. Costs of registration etc.

12. Present condition of real estate

13. Warranties

14. Pre-emption rights etc.

15. Issue of Purchase Deed etc

16. Attachments

17. Date

18. Signatures

In several coming blog posts I will discuss these items in some detail. However, I have in earlier posts mentioned the Seller and the Buyer .

Purchasing Real Estate in Sweden - The normal way a real estate (private home) transaction is carried out in Sweden

• The seller finds a suitable real estate agent, who advertises the real estate in newspapers and on the internet.

• The potential buyer gets in touch with the real estate agent, who shows the house to to the buyer and presents the pertinent facts about the house and its running costs.

• Following negotiations, the parties agrees orally on the transaction. Note that this is not binding on the parties as all agreements for sale of real estate in Sweden must be in written form.

• The buyer arranges for an inspection of the house. Such an inspection may also be made after the purchase contract has been sign, but then with a possibility for the buyer to cancel the contract if major defects are detected.

• The parties sign the purchase contract prepared by the real estate agent.

• At the same time, the buyer makes a down-payment of about ten per cent of the purchase price.

• On the take-over date set out in the purchase contract, the parties meet together with the real estate agent at the buyer’s bank.

• At this closing, the bill of purchase will be signed by the parties and the payment of the purchase price will be effected.

• The seller hands over the keys to the building together with any available maps and other documentation related to the real estate to the buyer.

Purchasing Real Estate in Sweden - The parties involved in a Swedish real estate transaction - Building Inspector

As I will explain in a future post, the buyer of Swedish real estate has a far-reaching obligation to ensure that the property he or she is going to purchase does not contain any defects.

It is thus advisable for the buyer to engage a building inspector to carry out a thorough inspection of the property; preferably before signing the purchase contract. However, with appropriate language, the inspection can be made afterwards if the purchase has been made conditional upon an agreed outcome of the inspection.

Purchasing Real Estate in Sweden - The parties involved in a Swedish real estate transaction - Bank

The buyer’s bank will normally be involved in the financing of the purchase either by lending or by connecting the buyer with providers of the long-term financing. The closing and take-over of the real estate usually takes place at the buyer’s bank.

Purchasing Real Estate in Sweden - The parties involved in a Swedish real estate transaction - Real Estate Agent

In almost all real estate transfers in Sweden a real estate agent is involved. The real estate agent is commissioned by the seller and will be solely paid by the seller, but has an obligation according to the Real Estate Agent Act (Fastighetsmäklarlagen 1995:400) to “carry out his commission carefully and in all observe generally accepted estate agency practice. In so doing, the estate agent shall watch and protect the interests of both the seller and the buyer.” (Section 12 of the Act).

As mentioned earlier, the normal Swedish buyer relies on the impartiality of the real estate agent although it is the seller who has engaged the agent and who is paying him the commission when a sale has been made.

Purchasing Real Estate in Sweden - The parties involved in a Swedish real estate transaction - Buyer

If the buyer is a limited liability company it is wise to have the buyer present a resolution by the board of directors of the company approving the purchase. The managing director of a company is normally not allow to decide on purchases of real estate on his or her own, unless sales and purchases of real estate constitutes the normal business of the company.

Normally, in transactions involving private homes, the buyer accepts to rely on the advice of the real estate agent, even if he is commissioned by the seller. The buyer would not seek the advice of a lawyer. Sometimes the buyer’s bank will read the purchase contract draft and advice the buyer.

When the real estate transaction concerns a commercial property the buyer would normally involve his own lawyer in the negotiations and production of transaction documents.

Purchasing Real Estate in Sweden - The parties involved in a Swedish real estate transaction - Seller

If the seller is a married, it will most likely be necessary to obtain the spouse’s consent to the sale. Such consent must be made in writing in the document used for registration purposes. However, to be on the safe side, it is advisable to have the spouse sign his or her consent also in the purchase contract even if it is the bill of purchase that is used in connection with the registration.

If the seller is a limited liability company it is wise to have the seller present a resolution approving the sale by the board of directors of the company. The managing director of a company is normally not allow to decide about sales of real estate on his or her own, unless sales and purchases of real estate constitutes the ordinary business of the company.

Normally, in transactions involving private homes, the seller takes only the advice of the real estate agent, who also prepares all necessary documentation and the seller would not seek the advice of a lawyer.

When the real estate transaction concerns a commercial property, the seller would normally involve his own lawyer in the negotiations and production of transaction documents.

Purchasing Real Estate in Sweden - Documentation of a Real Estate Transaction in Sweden

The documentation ordinarily consists of a Purchase Contract setting out all the provisions of the transaction and a Bill of Purchase confirming the transfer of title and the payment of the full purchase price.

Normally the purchase contract for a private home would cover four to six pages and for a commercial property not more than ten to fifteen. The bill of purchase would be a five to ten line document.

The bill of purchase normally constitutes the deed which is presented to the authorities for registration of the transfer of title. However, nothing prevents the use of the purchase contract instead but this is not common. Irrespective of which document is used, it is important to note that the requirements regarding the compulsory content of the transfer document must be met by the document used for registration purposes.

Purchasing Real Estate in Sweden – The Swedish Land Registry

All land in Sweden is divided up in units (“fastigheter”) according to the Land Parcelling Act (Fastighetsbildningslagen 1970:988). Each unit carries it own unique identification e.g. Malmö Advokaten 5:112, where the first part always denotes the city or municipality in which the unit is situated.

Until recently the borders of a property unit had to be fixed by marks in the ground, but now a unit can be cut up both horizontally and vertically. This allows the creation of new units comprising e.g. only one floor in an office building or the division of a tenement building with shops on the ground floor into two different property units; the ground floor with the shops and the other with the tenement floors.

The units and their owners are registered in the Swedish Land Register (Fastighetsregistret) according to the Property Unit Register Act (Lag on fastighetsregister 2000:224). It should be noted that it is only the registered owner (“lagfarne ägaren”) who is entitled to sell or mortgage his or her real estate. The information in the Land Register is computerized and open to the public.

Purchasing Real Estate in Sweden - Applicable Swedish Codes and Acts

The Land Code or Real Property Code (Jordabalken 1970:994) regulates the private real property law and contains the rules i.a. on real estate transfers, mortgages, leases and registration of ownership and mortgages.

In addition to the Real Property Code there are several other acts which come into play in connection with a purchase of real estate i.a. acts relating to various permits needed and tax laws; just to mention a few. I will mentioned them and link to them, if possible, when I refer to them in future posts.

The Planning and Building Act (Plan- och Bygglag 1987:10) contains provisions on the planning of land and water areas as well as building. The provisions aim, with due regard to the individual’s right to freedom, at promoting societal progress towards equal and good living conditions and a good and lasting sustainable environment for the benefit of the people of today’s society as well as of future generations.

Transactions involving condominiums / condos (“bostadsrättslägenheter”) are not covered in the Real Property Code but in the Tenant-Ownership Act, (Bostadsrättslagen 1991:614), which regulates the relations in the association and the obligations of the owner and the association.

Swedish Codes in English

As I have mentioned before, some Swedish codes have been translated into English. The main problem is that the government does not seem to be able to keep them up to date. The second problem is that the links to the translations are changed.

I have updated the links in the old post.

A summary of the available material is found in this List of translations into English of Swedish Codes.


The major Swedish codes translated are

• The Swedish Code of Judicial Procedure

• The Administrative Court Procedure Act

• The Swedish Penal Code

• The Swedish Enforcement Code

• The Swedish Environmental Code

You can download pdf file with a brief presentation of the Swedish judicial system.

The Swedish Code of Corporate Governance in final version.

Finally, the Swedish Law Lense contains links to Swedish Labour Legislation and to Swedish Business Legislation. Hopefully, I will find time to add additional ranslated Swedish acts.

Purchasing Real Estate in Sweden

In a series of blog posts I intend to present the Swedish rules on purchase of real estate (land, real property, private homes, villas, condominiums / condos and commercial real estate).

The posts will cover, hopefully, the following areas.

• Applicable Swedish Codes and Acts

• The Swedish Land Registry

• Documentation of a real estate transfer in Sweden

• The parties involved in a real estate transaction

• The normal way a real estate transaction is carried out in Sweden

• Pre-contract activities

• Compulsory content of the purchase contract

• Additional clauses in the purchase contract

• The buyer’s obligation to investigate the real estate

• Permits in connection with purchases of private homes / villas

• Permits in connection with purchases of commercial real estate /commercial property

• Financing of the purchase

• Taxes, fees etc. in connection with a purchase

• Down-payments at contract signing

• Activities in connection with the Take-Over

• Notes on Purchase of commercial real estate

• Notes on Purchase of condominiums / condos (“bostadsrätt”)

The easiest way of following the future blog posts is to use my RSS-feed. You do that by right-clicking here and then copy and paste in your RSS-reader.

If you would prefer to receive an email copy sent directly to you. please, either mentioned that as a comment or send an email to me at Swedish [dot] lawyer [at] gmail [dot] com

Sweden ranks #28 on List regarding Government Surveillance and Respect for Privacy

Privacy International, a human rights group formed as a watchdog on surveillance and privacy invasions by governments and corporations, today presented a Privacy and Human Rights global study as mentioned by Opinio Juris in this post.

You will find Sweden covered in the last part of the report.

I do not think that we Swedes are especially happy about finding Sweden mentioned among the countries showing a "systematic failure to uphold safeguards" and to have Sweden closely followed by Israel and the US. The only other EU country with a worse ranking is the UK (#33).

Hopefully the study by Privacy International will send a clear message to the new Swedish government not to continue the policy of the earlier government.

Changes to the Swedish Personal Data Act

The Swedish Parliament will soon decide to reform the Swedish Personal Data Act following a proposal of the Government.

- The intention is to amend the Personal Data Act to prevent the misuse of personal information and not, as the case is at present, to cover the handling of all such information.

- The changes will allow processing of personal data in unstructured material e.g. in word processing documents and single audio and video files. However, such processing must not violate the personal integrity of the registered person.

- Handling of personal data in violation of the Act will still be punishable if committed wilfully or by gross negligence. Ordinary negligence will no longer be punishable. The same applies to breaches of the rules regarding transfer to a third country of personal data if the third country has not an adequate level of protection for personal data.

- The Swedish Government considers its proposal to the Parliament in line with the EU Data Protection Directive 95/46/EU.

- The changes are intended to apply from January 1, 2007.

It's Official: Antarctica Is (Not) a Foreign Country

Opinio Juris notes here that

(T)he United States Tax Court ruled this week in Arnett v. United States that Antarctica is not a foreign country and therefore income earned there is fully taxable.

and at the same time that in 1993

the Supreme Court ruled in Smith v. United States that Antarctica is a foreign country for purposes of the Foreign Tort Claims Act.

It's an interesting post and I love the conclusion:

So I guess the rule is fairly clear: Antarctica is a foreign country if you are suing the United States, but is not a foreign country if the United States is suing you.

Why am I not surprised?