Home / Articles / The over 30-year-old Room Rental Act is being reformed: what do landlords need to know?

The Rent Act, which is over 30 years old, is being revised: what do landlords need to know?

In March 2026, the government submitted its proposal to reform the Rent Act. This marks the most significant upheaval in housing legislation in decades, and every real estate investor should familiarize themselves with the changes well in advance.

The current Rent Act has been in effect in Finland since 1995. Thirty years is a long time for any legislation, but in the housing market, it is an eternity. During this time, the market has changed beyond recognition due to digitalization, the rise of short-term rentals, and the institutionalization of rental housing. The number of private landlords has also grown enormously, without the law keeping pace.

The situation is now being rectified. The government’s March 2026 proposal updates both the Room Rental Act and the Housing Companies Act. The new legislation is scheduled to take effect in the fall of 2026. This is not merely a matter of technical fine-tuning, but rather a comprehensive reassessment of how tenancy works in modern-day Finland.

Why is the law being amended right now?

The old law has caused many practical conflicts because it does not take modern practices into account. Legislation has lagged behind, particularly when it comes to digital contracts and electronic communications. Short-term rentals have also remained in a legal gray area, and landlords have often had their hands tied when it comes to addressing disruptive behavior, for example. Processes have been slow, and resolving even simple issues has sometimes required lengthy legal proceedings.

Tarik Ahsanullah, Legal Director of the Finnish Landlords' Association, has emphasized that the aim of the reform is to make the tenancy relationship clearer and more predictable for both parties. The goal is for the rules to be clear to everyone from the moment the lease is signed.

Key changes from the landlord's perspective

Although the details will be finalized during the parliamentary debate, the main changes are already clear:

  1. Clarifying the grounds for termination and cancellation:Currently, addressing disruptive behavior or rent arrears can take months and require a decision by a district court. The reform aims to streamline this process so that problematic situations can be addressed more quickly.
  2. Digitalization enshrined in law:Electronic contracts and communications, such as email and apps, will be given official status. This will eliminate any ambiguity regarding when a notice—for example, regarding a rent increase—has been legally received.
  3. Clarification of security deposit policies:The return of security deposits and their use to cover damages are among the most common sources of dispute. The new law establishes clearer time limits and rules for the handling of security deposits.
  4. Reasonableness and clarity of rent increase terms:The reform also addresses how rent increases should be agreed upon. Vague terms regarding increases have led to disputes, and the new law requires investors to be more precise in their contractual language.

Short-term rentals and the rights of housing associations

One of the most talked-about reforms concerns short-term rentals, such as Airbnb. Until now, the line between professional accommodation services and ordinary rentals has been a fine one.

The update to the Housing Companies Act provides housing companies with better tools to address persistent and disruptive short-term rentals. At the same time, however, it protects shareholders’ right to use their property. Going forward, investors will need to be more careful about what the housing company’s articles of association say regarding rentals.

Energy Efficiency and Landlords' Rights

Another new element emerging in the legislative reform is energy efficiency-related renovations. The landlord’s right to carry out energy efficiency improvements in the apartment during the lease term will be clarified. This is important, as EU-level requirements for building energy efficiency are tightening rapidly.

How should we prepare for fall 2026?

Even though the final law has not yet taken effect, landlords should start preparing right away:

For investors, the legislative reform is, above all, an opportunity to professionalize their operations. Those who are familiar with the new rules will avoid unnecessary disputes and costly legal proceedings.

Sources: