The grey rental market refers to the phenomenon whereby individuals who informally broker rental accommodation offer it for a fee. These brokers mostly target foreign-language speakers. Such activities are criminal under Finnish law. Usually the name of such an offence is fraud.
Foreign-language speakers often do not know how to search for rental accommodation in our society, and are not aware, for example, of public and safe websites to search for accommodation. There is not enough support and advice on housing or how to find a home. This is why the grey rental housing market is gaining a foothold in our society.
Why do people rely on deceptive brokers?
Finding accommodation without knowledge of Finnish is difficult. Formal support to find accommodation, especially in your own language, may not be sufficiently available or may not reach the target group. The social services may provide a list of landlords, but the search for accommodation has to be done independently. Many people do not know where to get help to find accommodation when they need it. The Finnish language poses challenges when filling in the application form.
The service offered by the deceptive brokers reaches the target group easily, as they advertise especially in groups in their own language on various social media channels or spread the word through people they know. A common spoken language is often the connecting factor. A deceptive broker promises to find a home despite a person's possible previous credit history, or if the person is unemployed or in receipt of Kela benefits, and this further encourages the use of the broker's services. Lack of trust in the authorities and experiences in one's country of origin may discourage people from dealing with the authorities.
Foreign-language minorities also face discrimination when applying for housing. This makes it difficult for them to access rental housing, especially in the private market. Many do not receive any response to their applications. People become frustrated and their only recourse is often to rely on a deceptive broker who can help them quickly.
How is the phenomenon visible?
In many cases, the homes are not always what the customer was promised. The broker may have failed to tell the client that the property was being renovated. It may even be the case that the whole apartment does not even exist. The broker may continue to advertise the property even though they have just formally rented it to someone. Sometimes someone else is already living in the flat. The client may not have realised that they have signed a fixed-term tenancy agreement and the end of the tenancy may therefore come as a surprise. In many cases the flats have been in a poor state of repair and the rent has been overcharged.
Nevertheless, the broker has received their fee, which is often between €500 and €1,500. The broker may no longer be contactable, and so the money paid to the broker may not be recovered.
According to the experience of Katto, the use of deceptive brokers is common when moving from a reception centre to a municipality and later, for example, when moving to another municipality. The person wants to move to the place of their choice and does not want to rely on the authorities. It is then easy to resort to renting accommodation from deceptive brokers.
How do you recognise a deceptive broker?
- The broker advertises the property on social media such as Facebook
- The pictures in the housing advertisement are often borrowed from the internet
- The broker makes up excuses why you can't see the apartment
- The broker is in a hurry to get their commission and usually in cash
What are the consequences for the victim?
Every year, Katto encounters clients who have fallen victim to deceptive brokers. A major risk for clients who fall victim to this type of activity is homelessness, as using a deceptive broker often leads to further indebtedness, possibly eviction and eventually even homelessness. Many people borrow money from friends to pay the commission, and use their own savings for housing and living expenses to pay the loans. A person may default on rent payments and cause themselves to get into arrears.
A person who has fallen victim to a deceptive broker's actions will find it even more difficult to get a home and will be financially trapped. The broker has deliberately taken advantage of the client's vulnerable position, and by their actions further undermined it.
Always report to the police
The police receive reports of shady brokers with regrettable frequency. The police will always receive and investigate reports of crime. However, often the victims do not have sufficient evidence.
However, the police urge you to report the crime. Evidence may include a screenshot of the conversation between the victim and the broker, a recording of the conversation or the presence of a witness. Many victims of this type of broker do not report to the police because the victim may be afraid of being confronted by the police or the broker may threaten the victim. Many fear losing their residence permit.
In Finland, however, you can always trust the police. Every case should be reported to the police so that the phenomenon itself can be better dealt with. At Katto, we encourage our clients to report the crime so that the phenomenon can be tackled.
How to prevent this type of activity?
Housing authorities and other organisations, especially those providing advice, should be aware of this phenomenon. This means, in particular, developing and targeting housing-related advice to client groups and increasing the provision of advice in their own language. All actors should also know what to do if they come across a victim of a deceptive broker. In the interests of promoting equality, it is important to think in advance about how to act proactively, for example in the municipal area or in services in the welfare area, so that housing and housing-related information is available when it is needed.
How to avoid deceptive brokers?
Individual people advertise their homes for rent on public - and secure - platforms such as oikotie.fi and tori.fi. In addition, many companies selling and renting out flats advertise available flats for rent on their websites. You can get help with finding a home from various organisations or professionals.
Remember that vigilance and foresight are key when moving in the rental property market.
- Go and see the apartment before you sign the lease
- Check the rental agreement carefully before you sign it
- Always make a written rental agreement
- Never give money to the landlord before you have seen the property and signed the rental contract
- Always send the rent and deposit by bank transfer, do not give cash
- Do not give out your bank card details at any stage
- Never give your personal security number to a stranger or a private person.
More info and help:
Katto programme: https://moniheli.fi/katto/
Finnish police:
https://poliisi.fi/etusivu
www.poliisi.fi/en (English)
Report a crime
https://poliisi.fi/tee-rikosilmoitus
https://poliisi.fi/en/report-a-crime (English)
