The term “real estate” includes the following:

• Land
• Water area
• Buildings and structures

Real estate transactions are mainly governed by the Land Code (Sw. Jordabalken). In addition, a number of acts, such as the Real Property Formation Act (Sw. Fastighetsbildningslagen) and the Environmental Code (Sw. Miljöbalken), may be applicable depending on the circumstances of every transaction. In case of indirect real estate transactions, i.e., when the target is a company owning the real property, additional legislation such as the Swedish Companies Act (Sw. Aktiebolagslagen) and the Sale of Goods Act (Sw. Köplagen) are also applicable.

All land in Sweden is divided into delimited areas called properties and each property has a specific designation within the municipality. All properties are defined by boundaries marked in an official record kept by the Swedish Mapping, Cadastral and Land Registration Authority (Sw. Lantmäteriet). Lantmäteriet is divided into several local offices, each responsible for the properties located within their respective geographically defined area.

Lantmäteriet manages all official registrations of changes in ownership, mortgages and other rights relating to real estate. The registrations are made in the land register. In total, Lantmäteriet’s records include almost 5 million items and provides various information on Swedish properties including tax assessments, easements, land title, aerial photographs and maps, etc.

Most of the rights over real property require registration, including the rights listed below. However, residential or commercial leases are exempted as well as certain other general usufructs. Fees are charged for handling land registration and stamp duty is charged when a new mortgage is taken out on the property and when the ownership of the property changes.

• Ownership is formally registered when a property is acquired.
• A mortgage is registered when taken out on a property.
• Easements are often registered. If the easement has been created through an official process at Lantmäteriet, it is always registered. Easements that are created through agreements between landowners may also be registered, but such registration is not mandatory, which is why property records are not always exhaustive.
• Site leaseholds are registered when the municipality or the state grants a site leasehold instead of selling the property.

Land ownership may be proven by a registration of title deed (Sw. Lagfart). In Sweden, the purchase agreement between a buyer and a seller does not constitute sufficient protection from potential third-party claims on ownership. As a general principle, a buyer should always secure that a registration of title deed is obtained.

A title deed is obtained through a formal application at Lantmäteriet. Such application is made by the buyer and is subject to both stamp duty and a minor handling fee.

All registered records are available to the public and information about the ownership of real property can be sought for a fee. Excerpts of the land register, containing the most vital information, such as titles, mortgages, tax assessments, registered easements and encumbrances, are available online. Although, all underlying documents are not available online, and the process of obtaining physical copies may often be time-consuming.

Lantmäteriet is to varying degrees responsible for the information that can be found in its records. Generally speaking, it can be said that Lantmäteriet is liable for the information it keeps in it records, except for the information displayed in excerpts of the general part of the land registration system (Sw. fastighetsregistrets allmänna del), which is not legally binding. This means that Lantmäteriet is generally not liable for damages suffered by anyone who has relied on such information, should the information turn out to be incorrect.

Information in the general part includes a property's coordinates, area, easements, participation in communal facilities, plans and regulations. The underlying documents upon which Lantmäteriet has based its decisions regarding these questions are however legally binding, but as previously mentioned these can often times be time-consuming to obtain. In commercial real estate transactions this risk is typically carried by the seller via a warranty in the purchase agreement of the information set out in the annexed excerpt from the land register.

There are no restrictions on foreigners owning real property in Sweden.

Under certain circumstances, it is possible for the government to expropriate real property to serve certain public and other interests. The object for such expropriation may either be the title to a real property, or a specific right relating to real property.

The possibilities for expropriation are limited and strictly regulated in the Constitution and other specific real estate legislation, such as the Expropriation Act (Sw. Expropriationslag), the Planning and Building Act (Sw. Plan- och bygglag) and the Property Formation Act.

The expropriated party is always entitled to compensation. The principles for calculating such compensation are complex and set out in the Expropriation Act.

Generally, an interest in Swedish real estate can be held by the following:

• Ownership
• Partial ownership
• Condominium (Sw. Bostadsrätt)
• Site leasehold

The most common investment vehicle is a limited liability company owning real property. The main reason is that shares in a limited liability company can be transferred free of income tax, so that when transferring those shares, the real property technically is not transferred to a new owner, and therefore no stamp duty is levied. Furthermore, there is no need to transfer lease agreements etc. as the landlord is still the same entity.

However, any person or entity with a separate legal identity can be registered as a proprietor of registered land. Other investment structures include partnerships and limited partnerships.

Most real estate financing is performed via institutional lenders such as banks, trust companies, pension funds, credit unions and insurance companies.

Interest rates are generally fixed for a specified period of time, or are variables dependent on an underlying base rate.

Typically, it is the borrower’s responsibility to pay all of the lender’s legal costs and other costs, such as commitment and processing fees, caused by arranging property financing.

To fill the gap between the funding obtainable through banks and equity capital, it has become increasingly common to finance parts of transactions related to commercial real properties through alternative financing, such as bonds. However, bonds still stand for a small percentage of the total capital on the real estate transaction market.

The seller will usually prepare the initial draft of the purchase agreement and the related documents. The draft agreement is then reviewed and commented by the buyer and sent back to the seller. This process continues until a final agreement is reached.

Yes. Various encumbrances, such as tenancies, easements and other usufructs can be inherited by the new owner of the property. The rules are somewhat complex and depends on the kind of encumbrance involved.

Moreover, government authorities may, under certain circumstances, require the current owner of real estate to clean up contamination even if the owner did not cause it. Many of the potential risks relating to previous owners of the real property are normally handled through warranties in the purchase agreement.

Yes. A seller can retain liabilities relating to the real estate even after it has been disposed of. All contractual agreements with third parties entered into by the previous owner are generally not transferred to the buyer, unless agreed upon by the relevant parties. Such agreements may include facility management agreements, maintenance agreements, supplier agreements, etc.

Responsibilities under various encumbrances are, as a rule, transferred to the buyer when the ownership changes, but clauses stating that the seller shall indemnify the buyer for historic lease liabilities are common in purchase agreements.

The seller may also, under certain circumstances, be liable for contaminations/pollutions caused before or during his/her ownership.