19 housing companies are filed for bankruptcy across Finland, all in the same company in the background

Municipal finance Finding 19 housing companies throughout Finland for bankruptcy. Bankruptcy applications have been initiated this week in the Southern Ostrobothnia District Court.

Municipal Finance is a credit institution owned by municipalities and welfare areas, the state and the pension insurer Keva, which offers funding for, inter alia, state -supported housing production.

The housing associations applying for bankruptcy are owned by the Lakea company of Pohjalainen. The housing companies are located in Espoo, Vantaa, Jyväskylä, Järvenpää, Kuopio, Riihimäki, Seinäjoki, Turku and Vaasa.

According to the bankruptcy applications submitted to the District Court, municipal finance will bear more than EUR 4.4 million from housing companies.

Lake CEO Timo Mantila According to the bankruptcy applications, the company has not been able to pay housing associations for municipal funding. Lakea’s financial situation has long been difficult, he says.

The bankrupt housing associations have the use of the Lakea so-called Own funding model. It first paid seven percent of the total cost of the apartment. After that, the apartment is paid a monthly rent, some of which accumulates the apartment. After 20 years of living, the apartment can be redeemed by paying the final fee.

According to Mantila, the residents of the housing associations have not had any problems with the rent, but the problems are due to the housing market situation.

« Housing sales have not pulled, and even these homes have not been sold but have had to be rented. »

In addition, when a resident wants to decide on the contract in the Omaksi model, he or she will be returned to the capital he has paid. According to Mantila, the contracts have been terminated « to some extent ».

« During a good market, more homes are sold than they are returned, but now it has been the other way around. »

On the lake There are a total of 24 Omaksi funding model housing companies. Five housing companies have a different donor and have not now been filed for bankruptcy, but according to Mantila, the same challenges apply to them.

Attempts have been made to sell Lakea to Korpi Capital investment company, and according to Mantila, bankruptcies are being avoided by taking the shop to the finish.

“We still want to take such a voluntary merger arrangement,” he says.

Mantila says he is not yet able to assess what any bankruptcy would mean for housing associations or their capital.

« I can say that bankruptcy is the worst option for them, too. »