Lease for an indefinite period.. End of lease period. Deposit. Excessive rent payment.

The parties entered into a lease for an indefinite period including an agreement on a three-month period for termination, on 1 January 2019. In February 2020 the tenant informed the landlord that he intended to move out in March 2020. There was nothing to indicate that the lease was being rescinded or that notice of termination was being given; hence, this constituted unlawful rescission. The tenant says he paid rent for February twice. The landlord rejected the tenant’s demand for the return of his deposit and considered that he was within his rights in retaining the deposit to cover rent.

The Complaints Committee requested confirmation from the landlord that he had immediately begun advertising the apartment for rental as soon as the tenant had informed him of his intention of moving out. According to the landlord, the apartment was not let out until September 2020; he did not submit any evidence of having tried to let it out before then. Nor did the landlord reject the tenant’s assertion that he had paid the rent for February twice. The committee therefore took the view that the excess payment of rent for February would offset the landlord’s demand for compensation in respect of rent. In addition, the committee came to the conclusion that the landlord was entitled only to rent compensation up to the end of April, and consequently it was natural that the excess payment of rent should count towards rent for that month. Thus, the landlord was obliged to return the deposit in full, with interest.

Conclusion: The tenant was obliged to return the deposit, amounting to ISK 260,00.