Record 62 Housing Companies Bankrupt, Leaving 'Ghost Houses' Around Finland

Last year a record 62 Finnish housing companies filed for bankruptcy, leaving several apartment blocks abandoned and creating new 'ghost houses' across the country, YLE reported.

The number is small compared with Finland’s more than 90,000 housing companies, but filings have risen sharply over the past three years. Lawyers and property managers point to two main causes: runaway renovation debt and unpaid maintenance charges. Attorney Touko Raitis says buildings in low-demand towns with large repair backlogs can lose so much value that bankruptcy proceedings collapse for lack of assets. The Lakea case alone involved 24 housing companies, accounting for more than a third of last year’s filings.

When a housing company’s bankruptcy lapses because there are no funds or buyers, the property can be left unmanaged and become an environmental or safety problem. The result can be empty, unsafe buildings. Marianne Falck-Hvilstafeldt, acting CEO of the Finnish Association of Property Managers, urges the next government to study whether public funding or other solutions are needed to deal with these empty ex-company properties.

The Ministry of Justice has introduced amendments to the Housing Companies Act that come into force in October. Among the changes is a one-month cooling-off period after a bankruptcy filing, during which apartment owners retain possession rights. Local examples include two apartment companies in Virrat, Pirkanmaa, that filed this month after investors failed to pay maintenance charges.

There are local precedents. Two Killinkoski housing firms faced bankruptcy in July after years of unpaid fees see earlier coverage, and YLE reported this spring that token-sum property deals in Pirkanmaa left residents homeless in several cases earlier report.