Estonia Rental Laws: Pro-landlord, Neutral or Pro-tenant?

Estonia's landlord and tenant laws are judged by the Global Property Guide to be Pro-Tenant between landlord and tenant. Estonian law protects tenants from arbitrary eviction and unfair treatment, creating a stable rental environment. At the same time, landlords maintain significant rights to manage their property and enforce lease terms, especially through formal legal channels.

Rents: Can landlord and tenant freely agree rents in Estonia?

Yes, in Estonia, landlords and tenants are generally free to agree on the rent when entering into a lease agreement. The legal framework emphasizes contractual freedom, with some protective rules for tenants. Both fixed-term and indefinite contracts are allowed.

The lease agreement may include terms that define when and how the rent can be increased, such as annually or based on an index. If the agreement does not contain any provisions regarding rent increases, the landlord still has the right to raise the rent unilaterally, but only once per year and with at least three months' notice to the tenant. In such cases, the rent increase must be reasonable and properly justified, reflecting market conditions or other relevant factors.

Deposits

The landlord may request a security deposit at the beginning of the tenancy. By law, the amount cannot exceed three months’ rent. This is established in the Law of Obligations Act, which governs rental agreements in Estonia. In practice, one-month deposits are most common.

What rights do landlords and tenants have in Estonia, especially as to duration of contract, and eviction?

In Estonia, both tenants and landlords have the right to terminate a lease, but the process is subject to legal rules that primarily protect the tenant. A tenant may terminate a fixed-term lease early if the landlord seriously breaches the contract, for example, by failing to maintain the property or making the dwelling uninhabitable. In the case of an open-ended lease, the tenant does not need to provide a specific reason and may end the contract at any time by giving three months’ written notice.

Landlords, on the other hand, cannot terminate a lease without a valid and legally justified reason. Acceptable grounds include the tenant’s failure to pay rent, damaging the property, using the premises in violation of the agreement, or, in some cases, if the landlord genuinely needs the property for personal use. Even when such reasons exist, the landlord must provide the tenant with at least three months’ notice, unless the breach is severe enough to justify immediate termination.

If a tenant refuses to vacate the premises after the lease has been lawfully terminated, the landlord must apply to a court to obtain an eviction order. Only after the court issues a decision can a state bailiff enforce the eviction. Landlords are not allowed to remove tenants themselves without a legal process. Tenants who believe they have been wrongfully evicted may seek compensation or legal remedies through the courts.

How effective is the Estonian legal system?

The Estonian legal system is generally effective in handling evictions, but its approach prioritizes legal safeguards and due process, especially for tenants. Landlords can regain possession of property, but the process must follow strict legal procedures, and it is not immediate.

Legislation

Law of Obligations Act is the main law regulating residential and commercial leases. It defines the rights and obligations of landlords and tenants.

Brief history: Recent changes in Estonian landlord and tenant law

In 1992, centralized rent control was abolished. Housing privatization started in 1994 and continued till June 2001, shifting almost all housing from state ownership to municipal ownership, then to private ownership at very favourable terms (many buyers paid around 1% of the value of the property).

In a few cases, the property was restituted to pre-Soviet occupation owners, and the tenants could not buy the property but benefited from strong rent control, recently abolished. In 2004, the Supreme Court ruled that the abolition of rent ceilings for tenants in restituted houses is legal.