Yle already reported in August 2024 on how the negotiating position of tenants has weakened while the role of investors in housing companies has grown. The news specifically addressed situations where a single large owner controls a significant portion of the housing company’s shares. This may be an issue worth considering when buying an apartment.
What are we actually talking about
There have always been investors in Finnish housing companies. That is not a problem in itself. The problem arises when the ownership of one or a few parties becomes so large that it begins to steer the housing company’s decision-making toward their own interests.
A private investor with one or two apartments in the same building is a different matter than a real estate investment company that owns a third or half of the shares. The latter practically sits on the board of directors, decides on renovation schedules, and influences the charge policy. This is not speculation; it is a reality under the Limited Liability Companies Act and the Housing Companies Act.
The board reacts slowly – or not at all
One concrete risk relates to disturbances. When the majority of the housing company’s board of directors consists of investor representatives or investor-friendly individuals, the threshold for intervening with problem tenants may rise. The eviction process is slow and expensive. It is in the investor’s interest to keep the apartment rented, not necessarily to ensure that the neighborhood functions well.
This does not mean that all investors act this way. But the structure enables it. And as a buyer, it is good for you to know what kind of structure the building has before you make a decision.
The actual responsibility for choosing a tenant lies with the investor themselves, of course. They choose who they place to live next to you. The housing company has limited power to intervene in this beforehand.
Where to get the information
The ownership structure can be found in the shareholder register. Not from the property manager’s certificate, which is a unit-specific document and says nothing about the ownership distribution of the entire housing company. The shareholder register can be ordered from the National Land Survey of Finland for a fee, if the housing company has already been moved to the electronic register. At the time of writing, about 94% of the approximately 90,000 housing companies are already in the register. But if the company is not there yet, the list must be requested from the property manager. You can and should also demand this in writing from the real estate agent.
The shareholder register shows how many shares individual owners hold. If one party owns more than 20-30 percent of the shares, it is already a significant position in the housing company’s decision-making.
The proportion of rental apartments is a matter that must be investigated separately. Housing companies are not obliged to keep records of tenants, so the information cannot be found in any single document. In practice, the information must be asked directly from the property manager or a written report must be requested from the agent. There is no single correct figure for how many rental apartments there can be, but if more than half of the apartments are rented, the dynamics of the housing company are different than in a company dominated by owner-occupiers.
It is also worth looking at the minutes of the general meetings. Have there been votes? Have some decisions passed with a clear majority repeatedly with the same composition? That tells you more about the distribution of power than any other document.
The cost of financing may surprise you
Banks look at the housing company’s ownership structure when granting loans for apartments for sale. A high proportion of rental apartments or dominant investor ownership can affect the terms on which you receive financing. Some banks view these properties more cautiously, which in practice means stricter collateral requirements or a higher margin.
This is not a general rule, but it is a risk that is worth clarifying before making an offer, not after.
What this does not mean
It is not worth falling into the trap that an investor in a housing company is automatically a warning sign. A well-managed rental apartment is a well-managed rental apartment. A responsible investor wants to keep their property in good condition for the sake of their own investment.
The question is about structure and the exercise of power. Small, fragmented investor ownership is a different matter than concentrated institutional ownership where one party pulls the strings. Distinguishing between these is what a buyer needs to be able to do.
Most buyers fail to perform this analysis because no one tells them it would be worth doing.
OUN® performs housing company analyses for you.
We carefully review all the documents you provide, so it is worth providing information on this matter along with other documents. We do not sell apartments, we do not represent sellers. We do only one thing: we find out the facts for you.
OUN® reads the property documents for you and delivers a plain-language analysis within 24 hours. We are 100% on your side – we are the homebuyer’s best friend!
