Renting

The most common way of renting in Iceland is from private landlords. You can apply for social housing in your municipality, but there is a shortage of council housing and waiting lists can be long.

Most people rent in the private sector. When you have found somewhere you would like to live, you will be asked to sign a lease agreement and pay a deposit. Make sure you familiarise yourself with the responsibilities involved with renting a property. The deposit should be returned within 4 weeks after you return the keys to the property if no damages have been reported on the premises.

Housing for rent are usually advertised online. People in rural areas looking for housing are advised to seek information from the offices of their municipality. Facebook is a widely used tool in Iceland for renting. You can access many rental groups by searching the word “Leiga” or “Rent” on Facebook.

For both Icelanders and foreigners, one of the main challenges of living here is finding affordable rental housing. Asking the people around you for help is often a good way to find a place to rent. These could be your colleagues or foreign friends who have been living here longer.

Here are some websites and Facebook groups for rental housing (those groups normally have descriptions both in Icelandic and in English).

“Höfuðborgarsvæðið” means “the capital region.”

101 Reykjavik is downtown, and 107 and 105 are the postal codes within walking distance of downtown. 103, 104, 108 are a bit further away but still accessible with public transportation or bike. 109, 110, 112 and 113 are the suburbs, also accessible by bike or bus.

When it comes to the capital region, a significant number of people live in the municipalities surrounding Reykjavik – such as Garðabær, Kópavogur, Hafnarfjörður and Mosfellsbær. These areas are well connected with the city centre and may be slightly more affordable. These areas are popular among families, as you may get a bigger house for the same price, be able to live in a quiet neighbourhood closer to nature, and yet they are not far away from the capital. If you don’t mind commuting or you have a vehicle and prefer paying less than downtown, these municipalities may be of interest to you.

Some people who work in the capital region commute from even further away with their personal car. This includes Suðurnes (the Southern Peninsula where the airport is located), Akranes, Hveragerði and Selfoss, with a commuting time up to an hour one way.

The types of housing that apply to houses and apartments are:
Einbýli – stand-alone home
Fjölbýli – apartment block
Raðhús – terraced house
Parhús – duplex
Hæð – an entire floor (of a building)

Select the checkboxes after picking which neighborhoods you are interested in the search sites. “Tilboð” means that you can make an offer. This may indicate that a high price is expected.

Facebook Groups (in English):

Leiga

Leiga í Reykjavík

Leiga Reykjavík 101.105.107

Leiga á Íslandi – Rent in Iceland

Leiga Reykjavík, Kópavogur, Garðabær, Hafnarfjörður

Leiga 101 Reykjavík

Rent in Iceland

101 Rent

Rent

Rent in Hafnarfjörður, Garðabær or Kópavogur

If you are interested in a listed apartment, it is advisable to send a short message to landlord including your name, contact information and short note about you and your family (if applicable). Try to demonstrate how you will be a good tenant, noting your ability to pay rent on time and that you will take good care of their apartment. Also note in your message if you have a reference from a previous landlord. Remember that rental apartments receive a lot of interest, and may be off the market within a couple of days. Acting fast and ensuring that you stand out to the landlord as a good potential tenant will increase your chances of finding a rental apartment.

For useful information about renting, check out the website www.leigjendur.is (in three languages): English – Polish – Icelandic.

The site is managed by the Consumer’s Association of Iceland and provides information about lease contracts, deposits and, condition of rental housing to name a few examples.

If you have a dispute with your landlord, or you are unsure about your rights as a tenant, you can contact the Tenants’ Support. The Icelandic Consumers’ Association operates Tenants’ Support (Leigjendaaðstoð) under a service level agreement with the Ministry of Social Affairs. The role of the Tenants’ Support is primarily to provide information, assistance, and advice to tenants on rent-related matters, free of charge.

The Tenants Support’s legal team answers questions and provides guidance when tenants need to seek their rights. If an agreement cannot be reached between the tenant and landlord, the tenant can get help with the next steps, for instance, with taking the case before the Housing Complaints Committee.

Tenants can bring any rent-related questions to the Tenants’ Support, including questions concerning the signing of a lease agreement, rights and obligations during the lease term, and the settlement at the end of tenancy.

You can also check out answers on some frequent questions on their website.

The Association of Tenants in Iceland is a independent association that wants to improve the rights and interests of tenants. It pushes for reforms to the tenancy law, lower rents and sufficient supply of housing. Members can get assistance in matters related to renting. 

A rental agreement is a contract under which a landlord allows a tenant to use and occupy its property for some time period, shorter or longer. The purpose of officially registering rental agreements is to guarantee and protect the rights of the parties to the agreements.

Since the beginning of the year 2023, rental agreements can be registered electronically. It´s mandatory to do that for professional landlords, and doing it is also one of the conditions for those who plan to apply for housing benefits.

It´s easy to register a rental agreement electronically. Tenants can do it themselves if the landlord has not done it.

Registering a rental agreement electronically has many benefits. Signing is done electronically so people don´t have to be at the same place when signing. There is no need for signature witnesses, and no further registration (notarisation) is necessary in case tenants like to apply for housing benefits. The process is also overall safer and requires less paper and time even.

Rental agreements are available in many languages if they have to be done on paper:

English

Polish

Ukrainian

Icelandic

The rental agreement must be in two identical copies for the tenant and the landlord.

If the lease agreement has been registered (notarised), the tenant shall have the notarisation cancelled when the lease term ends. If this has not been done within a week at the latest, it shall be cancelled at the request of the landlord.

You can have your lease notarised at your local District Commissioner.

Rent may either be fixed, which means it cannot be changed until the contract expires, or it may be connected to the consumer price index (CPI), which means it will increase or decrease based on the index every month.

Sometimes rent includes bills, but more commonly, tenants pay for their own electricity and heating. If it’s not clear, make sure to inquire if the rent covers owners’ association costs.

Do not send funds without seeing the apartment in person or through video chat. If a potential landlord says they are unable to show you the place, this may be an indicator of a scam and is not worth the risk.

A security deposit is money that is given to a landlord as proof of intent to move in, care for the home and pay rent and bills on time. Information about how much money you pay, and in which form, should be included in your lease. The deposit may vary depending on the property and normally equals one to three months’ worth of rent.

Before the rented premises are handed over, the landlord may demand that the tenant put up a deposit for the full performance of his/her side of the lease, such as for the payment of rent and compensation for potential damage to the rented premises for which the tenant is liable.

If a deposit is required, it should be paid through one of the following:

1. A guarantee from a bank or comparable party (a bank guarantee).
2. A personal guarantee by one or more third parties.
3. An insurance policy covering rent payments and the return of the rented premises in good order, purchased by the tenant from an insurance company.
4. A deposit paid by the tenant to the landlord. The landlord shall keep this money in a separately marked demand deposit account with a commercial bank or savings bank bearing the maximum available rate of interest until the payment date, and it shall be paid to the tenant if it does not prove necessary to draw on the deposit. No attachment may be made in this money while it is in the landlord’s keeping. The landlord may not dispose of the money or make deductions from it without the tenant’s approval unless a conclusion has been reached establishing an obligation on the part of the tenant to pay compensation. The landlord may, however, use the deposit money to pay outstanding balances of rent, both during the lease period and at the end of the lease period.
5. Payment to a landlords’ mutual insurance fund of which the landlord, being a legal person, which lets out premises on a commercial basis, is a member. This fund may only be used to meet damages resulting from default on the landlord’s leases. The landlord shall keep the mutual insurance fund separated from other parts of its operations.
6. A deposit of a type other than those listed in points 1–5 above which the tenant proposes, and the landlord accepts as valid and satisfactory.

The landlord may choose between the types of deposit from 1-6 but the tenant shall have the rights to refuse to advance a monetary deposit according to item 4 providing they offer another type of deposit instead which the landlord regards as satisfactory.

As a tenant, you have a right to:

• A written lease agreement that is fair and complies with the law.
• Know who your landlord is.
• Live in the property undisturbed.
• Live in a property that’s safe and in a good state of repair.
• Be protected from unfair eviction (being told to leave) and unfair rent.
• Have your deposit returned within 4 weeks after you return the keys to the apartment to the landlord, provided there is no unpaid rent or damages.

Your responsibilities:

• Always pay the agreed rent on the agreed date – if you are in dispute with landlord or the property requires repairs, you must still pay the rent. Otherwise you will be in breach of your lease and at risk of being evicted.
• Take good care of the property.
• Pay bills as agreed with the landlord.
• Give your landlord access to the property when requested. Your landlord must give you notice and arrange a reasonable time of the day to visit the property or carry out repairs. You have the right to be in the apartment when the landlord or repair persons are there, unless you agree otherwise.
• Pay for repairs if you have caused damages – this includes damage done by your guests.
• Do not sublet your property unless the lease or landlord allows it.

If you are in breach of any of the above points, your landlord has the right to take legal action to evict you.

Your landlord’s main responsibilities include:

• Providing you with a lease.
• Maintaining the property and keeping it on good condition.
• Giving you the notice and getting your approval before accessing the property.
• Following the legal procedures if they want you to leave the property, whether it is a legal notice or a termination of the lease.

Tenants are expected to treat the rented property with care and in accordance with the terms of use that have been agreed upon. If the rented premises are damaged by the tenant, members of their household or other persons who they permit to make use of the premises or to enter and move about in them, the tenant shall take measures to repair the damage as soon as possible. If the tenant neglects this duty, the landlord may have repairs carried out at the tenant’s expense.

Prior to this, however, the landlord shall inform the tenant in writing of his/her evaluation of the damages, stating the remedial measures required and giving the tenant four weeks from the date of receipt of such evaluation in which to complete the repairs. Before the landlord has the repairs carried out, they have to seek the opinion of an inspector and seek his approval of the expenses involved after the work has been completed.

If you are living in an apartment building, there is usually some shared space with the tenants of the building (sameign). This could include a laundry room and staircases for example. The owners´ association (húsfélag) makes decisions regarding the building in formal meetings, including renovations of the building. Some associations hire companies to manage the association’s affairs, but others run it themselves. Tenants can request to sit in on these meetings but are not allowed to vote.

In some apartment buildings the owners are expected to take turns cleaning the common space if the owners´ association decide that all the people living in the building must do so. If a tenant is expected to partake in this work, then it should be mentioned in the lease.

A lease for an indefinite period may be terminated by both parties. Notice of termination shall be stated in writing and sent in a verifiable manner.

The notice period for termination of a lease that is for an indefinite period should be:

1. One month for storage sheds, irrespective of the purpose for which they are used.
2. Three months for single rooms in shared premises.
3. Six months for residential dwellings (not shared).
4. Six months for business premises for the first five years of the rental period, nine months for the next five years after that and then one year after a rental period of ten years.

In case of a definite lease (when both parties have clearly stated for how long the property would be rented), the lease terminates on the fixed date without any special notice. It may, however, be agreed that such a lease may be terminated due to special grounds, events, or circumstances. These special grounds, events or circumstances have to be stated in the lease and cannot be special grounds that are already mentioned in the housing lease act. If this is the case, the mutual notice period for termination shall be at least three months.

In addition, a landlord who is a legal person that is operated on a non-profit basis may terminate a lease made for a definite period with three months’ notice when the tenant no longer meets the legitimate and relevant conditions set by the landlord for leasing the premises. These conditions need to be stated in the lease, or may apply when a tenant fails to provide the information necessary to verify whether he/she meets the conditions. Such terminations shall be made in writing, stating the reason for the termination.