Renting

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Renting residential housing involves both rights and obligations. Here you can find information for tenants and landlords, as well as details on tenancy agreements and registration in the HMS Rent register. You will also find information about housing benefits.

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Creation and registration of tenancy agreements

Renting residential housing can be a significant step for both landlords and tenants, as it involves both rights and obligations. The landlord is handing over their property for rental, and the tenant may be renting residential housing for the first time.

More detailed information about rights and obligations related to the rental of residential housing can be found on the website of the Consumers Association of Iceland – Renting Helpline.

Tenant of residential housing

When renting residential housing, statutory obligations and rights apply to tenants. It is important to familiarize yourself with these before entering into a lease agreement.

Tenant’s obligations

The tenant has significant obligations toward the landlord and the rental property. These include, among other things, to:

pay the rent on time
take good care of the property
report any defects or damage as soon as possible

Tenant’s rights

The tenant also enjoys rights under the law. These mainly include the right to:

receive a written and clear lease agreement
receive information on the amount of rent and any changes to it during the lease period
receive the apartment in a habitable condition
have the security deposit kept in a separate, unrestricted account earning the highest possible interest
receive the security deposit back with accrued interest at the end of the tenancy (if no claim has been made against it by the landlord)
apply for housing benefits

Here you can find more detailed information for tenants.

Lease agreement

A lease agreement is the fundamental document between a landlord and a tenant. According to law, a lease agreement must be in writing and registered in the HMS Rent Register.

It is necessary to enter into a written lease agreement to facilitate the resolution of disputes and to protect the parties if problems or misunderstandings arise at a later stage.

In addition to basic information about the parties to the agreement and the property, the agreement must specify whether:

the rental concerns a room or an apartment
the agreement is for a fixed term or an indefinite period
costs such as heating or electricity are included
a security deposit is required and in what form

The rent amount, payment date, and payment method must also be stated, along with an inspection report on the condition of the property and fire safety.

Landlord of residential housing

When renting out residential housing, statutory obligations and rights apply to landlords. It is important to familiarize yourself with these before the rental begins.

Landlord’s obligations

The landlord has obligations toward the tenant and the rental property. These include, among other things:

the duty to maintain the property and any fixtures and equipment that come with it, such as plumbing, electrical systems, windows, doors, and appliances
ensuring that the property is in a habitable condition at the time of delivery
providing clear and timely notices, for example regarding the right of first refusal, termination, and changes to the rent

Landlord’s rights

The landlord also enjoys rights under the law, including the right to:

receive rent payments on time
access the dwelling for necessary repairs, following consultation with the tenant
require the tenant to pay compensation or carry out repairs if damage occurs due to the tenant’s actions
have the property returned in the same or a comparable condition, taking normal wear and tear into account

Here you can find more detailed information for landlords.

Housing benefits

Housing benefits are monthly payments from HMS intended to assist people who rent residential housing.

The amount of housing benefits depends on the number of people in the household, income, assets, and the rent amount.

Here you can find more detailed information about the application process, eligibility requirements, special housing benefits, and access a calculator that estimates the amount of housing benefits.

Registration of lease agreements

From 1 January 2026, all landlords are required to register tenancy agreements in the HMS Rent register. The register includes, among other things, information on the type of housing, location, rent amounts, and the validity period of agreements.

Checklist for lease agreements

When entering into tenancy agreements, it is important to ensure that the following are in place:

clear information about the rental property itself and the lease period (link)
information on rent, payments, and deposits (link)
a condition report and information on the property’s fire safety (link)
a decision on any special provisions or the tenant’s right of first refusal (link)

Who does what?

	Landlord	Tenant
Lease agreement	Draws up a written, lawful agreement containing all necessary information and registers it in the HMS Rent register.	Has the right to a clear agreement; any ambiguity shall be interpreted in the tenant’s favor.
Condition of the property at handover	Is responsible for ensuring that the property is in a lawful, safe, and healthy condition.	Has the right to receive a property that is habitable and free of defects, unless otherwise clearly stated in the agreement.
Maintenance and repairs	Handles major maintenance and permanent repairs (roof, plumbing, electrical systems, etc.).	Takes care of minor maintenance and reports defects immediately.
Response to or consequences of neglect	May be required to grant a rent reduction, carry out repairs, or face cancellation of the lease.	May claim a rent reduction, request that repairs be carried out at the landlord’s expense, or cancel the agreement.
Deposits	May require a deposit; must keep it in a separate account; may only use it based on a justified claim.	Has the right to a refund within four weeks if no lawful claim is made.
Rent payments	May only collect lawful rent as stated in the agreement and must pay taxes and charges on rental income.	Must pay rent on time and has the right to a clear breakdown of costs.
Access to the property	May inspect the property with notice and in moderation; emergencies are exempt.	Has the right to privacy and may refuse unnecessary disturbances.
Subletting	May approve or reject subletting if there are justified reasons.	May request permission to sublet the property; approval is generally required.
Return of the property and inspections	Inspects the property, makes claims, and refunds the security deposit within the legal timeframe.	Returns the property in the same or comparable condition, taking normal wear and tear into account.
Termination or cancellation	May terminate the agreement or demand eviction in case of breach, following lawful procedures.	May terminate or cancel the agreement in accordance with the contract if the property is dangerous or if the landlord seriously breaches the agreement.
Advisory services	May seek advice from the Consumers Association of Iceland – Renting Helpline or the Homeowners’ Association.	May seek advice from the Consumers Association of Iceland – Renting Helpline.