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Deputy Ombudsman Pölönen: Senate Properties’ position as a state monopoly lessor is not based on law

Deputy Ombudsman Pasi Pölönen examined the legal basis of the state’s rental system and the legal status of Senate Properties as a monopoly lessor of state agencies. 

Pölönen considered that Senate Properties’ activities have not been based, at least in 2016–2020 on law, as required by section 84 of the Constitution of Finland, with regard to the grounds and pricing of tenancy contracts within the state. The prevailing legal state has also been unconstitutional in terms of the monopoly status created for Senate Properties. 

Senate Properties is an unincorporated state enterprise, and part of the state. According to the law, Senate Properties has the task of managing the state’s real estate assets. In connection with the change in the state rental system implemented at the beginning of 2016, the status of Senate Properties in relation to its tenants was changed by decree. The possibility of concluding contracts directly with lessors other than Senate Properties was removed. Senate Properties thus obtained a monopoly in relation to its state-owned in house -customers.

The Deputy Ombudsman noted that the Act on Senate Properties and Defence Properties, which entered into force on 1 January 2021, now contains the necessary legal provisions on internal service contracts of the state. 

As to whether the state authorities and institutions were obliged to use the premises services of the Senate Group’s enterprises and to conclude a service contract for premises with the enterprise, Deputy Ombudsman Pölönen stated that there is no mandatory provision for this in the legislation. Government agencies and institutions can thus also acquire premises on the free market.

The request for information and opinion sent by the Deputy Ombudsman to the Ministry of Finance on 7 January 2020, and the decision 6870/2019 in question have been published in Finnish in their entirety at www.oikeusasiamies.fi.

For more information, please contact Principal Legal Adviser Jarmo Hirvonen, tel. +358 9 432 3336.