Create and register lease agreement

Rent amount

• The rent must be reasonable and clearly stated in the lease agreement.

• If a fixed-term lease agreement is concluded, it is not permitted to agree on changes to the rent amount during the first twelve months of the lease term. This applies, for example, to indexation of the rent and other rent adjustments

• Once more than 12 months have passed since the lease came into effect, either party may request a change to the rent amount, for example, to bring it in line with the market rate for comparable housing, or due to increased operating costs incurred by a legal entity

• Disputes regarding rent may be referred to the Housing complaints committee (Kærunefnd húsamála)

Rent payments

• Rent shall be paid on the first day of each month, in advance, for one month at a time, unless otherwise agreed

• If the due date is a public holiday, the rent must be paid on the next working day

• If the tenant does not pay within seven days from the due date, the landlord is entitled to charge the highest legally permitted default interest until the date of payment.

Deposit

The parties may agree whether deposit is to be provided to ensure proper performance of the lease agreement. The deposit may, for example, cover rent payments and damage for which the tenant is responsible.
Possible forms of deposit include:

• a bank guarantee

• a third-party deposit (joint and several guarantee)

• rent payment and move-out insurance with an insurance company

• a security deposit held by the landlord in a separate, non-restricted account earning the highest possible interest until the payment date

• other forms offered by the tenant and deemed valid and sufficient by the landlord