Rescission of a lease for a definite period. Deposit.

A lease for a definite period was made for the period 1 March 2020 to 28 February 2021. The tenant put up a deposit of ISK 400,000 at the beginning of the rental period. On 1 December the tenant announced that he was not able to pay the rent and asked the landlord to use part of the deposit towards the rent.  The landlord informed the tenant on 9 December that as he was unable to pay the rent, he must return the keys to the apartment.  On 13 December the landlord informed the tenant that as he [the tenant] had moved out and he [the landlord] had been unable to contact him by telephone, he had had to pay a locksmith to open the apartment. When the landlord entered the apartment he realised that the tenant had not moved out, as his possessions were still in the apartment. The tenant then requested the return of the deposit, less an amount to cover 13 days in December, as the landlord had requested him to come and remove his possessions and clean the apartment. The landlord refused to return the full deposit.

The Complaints Committee considered that the landlord had understood the tenant’s communication of 1 December as meaning that he was moving out that same day. The tenant, on the other hand, had wished to stay in the apartment for the remainder of the lease period, and to have rent deducted from his deposit.  As the landlord demanded that the tenant vacate the apartment after he realised that the tenant was still living there, he had deprived the tenant of his right of use of the department without legal grounds for doing so.

Conclusion: The landlord was required to return the tenant’s deposit amounting to ISK 345,478.