Renters' Rights: An Overview
Translation: Mark Ioli and Julie Summers
When you think about a rental agreement, you probably imagine page after page of text that you barely consider before signing on the dotted line; after all, you need a roof over your head and are ready to pay for it. But it can be useful to know a little bit about your rights as a renter. Icelandic law lays out the rights and responsibilities of both renters and landlords, including so-called minimum renters' rights; if a rental agreement deviates in any way from the requirements of the law, it is only valid if the deviation is in the renter's favor.
The rental agreement
In general, rental agreements are done in writing and signed by both parties, as required by law. However, even if no written agreement exists, all rental laws still apply.
In general, it is not necessary to officially register your lease agreement; however, renters who may qualify for housing benefits must have their lease agreements officially registered, which is done at the district commissioner's office. You can learn more about housing benefits on the Housing Finance Fund's website at www.husbot.is.
The lease agreement must include certain information, such as whether the lease is fixed-term or continuing; monthly rent costs, whether they will change during the rental period and, if so, how much; and whether the landlord requires a deposit or insurance of some sort. The landlord can require the renter to pay a deposit before moving in. The deposit is intended as insurance in the case of missed payment or damage to the property. As previously stated, the rental agreement must explicitly state whether the landlord expects a deposit to be paid. If it is not stated in the agreement, the landlord cannot require it later.
A lease agreement may be fixed-term, meaning it specifies the end of the rental period, or continuing, meaning the lease does not expire until one of the parties takes action to end it. Unless otherwise specified, the lease is considered to be continuing.
Next, we will look briefly at a few issues related to renters' rights and responsibilities that are good to keep in mind during each phase of the rental period: at move-in, during the rental period, and at the end of the rental period.
Before the rental property is officially handed over to the renter, the renter and landlord should inspect the property to ensure that everything is in satisfactory condition. Another inspection should be conducted at the end of the rental period. If either party requests an independent inspector, both parties must agree on an appropriate individual. An outside inspector produces an inspection report, which details the property and its current condition. This report is then used to help resolve any disputes regarding damage at the end of the rental period. There are no requirements regarding the education or experience of the independent inspector other than the fact that the renter and landlord must select someone that they agree is qualified for the job. Generally, this is some sort of tradesman who has specialized knowledge of construction, for instance a carpenter.
Condition at move-in
At move-in, the rental property should be in the agreed-upon condition; that is, it should be fit for habitation. If the renter discovers any problems with the property, they must notify the landlord in writing within four weeks of moving in and demand that the situation be rectified. Otherwise, the renter waives their right to complain at a later date.
Problems with the property after move-in
If problems with the property that were not readily observed in the initial inspection come to light after the renter moves in, the same principle applies. The renter must notify the landlord in writing and demand that the situation be rectified. If the renter fails to do so, they are essentially stating that they are content with the property as is. In this situation, the renter must notify the landlord of any problems with the property within 14 days of first noticing them.
If the landlord fails to address a problem
If the landlord has been notified of issues with the property and fails to address the situation within four weeks, the renter is allowed to deal with the problem themself and subtract the resulting costs from the next month's rent. However, the renter must first seek verificationfrom an inspector.
If the renter does not exercise their right to address the problem themself, and the landlord still fails to address the problem, the renter can nullify the lease agreement eight weeks after the landlord was notified of the problem. However, the problem must be serious enough to affect the renter's intended use of the property. In certain cases, the renter may also be entitled to have rent payments lowered until repairs have been completed.
During the rental period
In general, rent should be paid on the first day of the month, one month at a time, but other arrangements can be made as long as the renter finds them suitable. As already mentioned, the lease agreement must state the rental costs and can indicate whether the cost will change over the rental period, for instance in accordance with a certain index.
The landlord is responsible for overall maintenance of the rental property, both inside and out. The property must be kept in good condition, which involves for instance replacing the flooring and other surfaces subject to wear and tear as needed and painting as needed. The renter is responsible for day-to-day maintenance, such as changing lightbulbs, replacing batteries in the smoke detector, and cleaning the gutters. If the landlord fails to meet their maintenance responsibilities, the renter can give them written notice of what needs to be done and urge them to take care of things. If the landlord fails to act within four weeks, the renter can make arrangements themself and subtract the cost from their next rent payment. However, they must first consult an inspector. The renter may also be entitled to make lower rent payments until the problem has been resolved.
Right to sublet
The renter may not sublet the property to another party without the permission of the landlord. While the renter may allow close relatives or friends to live with them on the property, this is not considered a sublease, provided there is no reimbursement and it is done in a reasonable manner, consistent with the size and purpose of the property.
At the end of the rental period
Condition of the property
The renter and landlord should also perform an inspection at the end of the lease, as was done at the beginning, which can once again be performed by an independent inspector. If there's a report from the initial inspection, it can be compared with the later inspection report to settle any disputes regarding damages to the property and determine whether the renter is liable for any repairs.
First right of refusal
At the end of the rental period the renter generally has what is called a first right of refusal to continue renting the property, so long as the landlord intends to continue renting it out for at least one additional year. If the renter choses to exercise this right, they must inform the landlord, in writing, at least three months prior to the rental agreement running out or the notice period ending. If the landlord does not respect this right they must provide monetary compensation to the renter for any losses the renter can prove they have incurred.
In certain cases, however, the renter does not have this right, for instance if the rental is a single room in the same home where the landlord lives, or if the landlord intends to personally use the property at the end of the rental period or offer it to immediate family members. It also does not apply if the rental agreement is broken, or if the renter behaves in such a way during the rental period that the landlord has cause to break the lease.
Terminating a lease
The renter has the right to end an open-ended agreement with six months' notice in the case of apartments. The period begins on the first day of the first month after the landlord is notified. So for instance, if notice is given in March, the period begins on April 1 and ends October 1. In general, fixed-term leases are not terminated in this manner, but agreeing to such terms is permitted, in which case the notice period is at least three months.
Breaking a lease
A renter may break a lease if the landlord defaults on the terms of the lease in some way. Breaking a lease essentially means the agreement is immediately terminated such that the renter no longer rents the property and is freed from paying rent.
Among the reasons a renter could break a lease is the landlord's refusal to address problems with the property despite the renter's requests. Another circumstance is if the rental property becomes damaged or deteriorates to such an extent that it is no longer deemed habitable, or if a health authority determines that the living conditions are unsafe due to no fault of the renter. Repeated and significant disturbance of a renter's peace by neighbors in the same building can also be grounds for breaking the lease under certain circumstances if they have asked the landlord in writing to take action to remedy the situation and have not received an appropriate response. An example would be repeatedly playing loud music which disturbs the neighbors.
The renter may exercise this right within eight weeks of being made aware of the landlord's breach, but in order for it to be valid they must notify the landlord in writing.
It must be pointed out that the landlord also has the right to break the lease under certain circumstances, including failure to pay rent on time. The landlord may break the agreement for late payment of rent, provided the renter has been notified in writing that payment must be made within seven days, after which time the landlord may exercise their right to terminate the lease. The landlord may also break the lease if the renter sublets the property without permission, as well as if the renter utilizes the property in an unauthorized manner. This includes any use that violates the rental agreement or the law itself, and if the renter does not cease the behavior despite written notification, the landlord may terminate the rental agreement.
Rental agreements with Student Services
Student Services (FS) maintains a rental operation whereby University of Iceland students can obtain housing while they are studying. FS has permission to deviate from certain housing laws due to the unique nature of their operation, which is serving students. As previously mentioned, there is an exception to the ban on subletting in the case of close friends or family members staying with the renter; however, this exception does not apply in rental agreements with FS.
The previously mentioned first right of refusal does not apply to FS renters, but the rental agreement may be extended, provided the renter fulfills the requirements laid out by FS.
FS may also terminate the rental agreement for certain reasons, such as the renter not completing enough credits per semester, ending their studies, purchasing housing in the capitol area during the rental period, or no longer fulfilling the requirements for dormitory housing with FS, in which case a three-month notice will be given. More information on rental agreements and rules regarding issue of rental units by FS can be found at www.studentagardar.is.
Orator's renter hotline and the General Rental Association
In closing it should be mentioned that this semester Orator, the student society of the University of Iceland's law department, and the General Rental Association (í: Almenna leigufélag) will provide free advice to renters by phone on select Tuesday evenings from 18:00-20:00. More information can be found on their respective Facebook pages.
Those who are particularly interested in renters' rights can directly consult the housing laws, currently available only in Icelandic, which can be found on the Icelandic Parliament's website at www.althingi.is/lagasafn.