The negotiations are conducted between two local parties; the landlord and a tenant organisation, usually affiliated to the Swedish Union of Tenants. This system has advantages for both. Individual tenants negotiating on their own would be in a weak position. For the landlord this is an effective way of handling rent increases for a large number of tenants.

Negotiations generally have two points of departure: the utility value of the apartments and changes to the cost of building and managing the housing. The utility value is based on how tenants generally value various characteristics such as the nature of the apartment, benefits, location, environment, quality of property management et cetera.

Collective negotiations are normally conducted once a year. Sometimes the parties do not reach an agreement. If the landlord is a public municipal housing company the dispute is then referred to the Rental Market Committee for mediation or ultimately a decision on the amount of the rent increase.