Unfair rental prices can be overruled

An amendment to the Rent Act authorises the Rent Control Board to interfere with house rental prices.

The new provision in the law states that the board can process complaints from disputing parties regarding agreed rental prices, overrule clearly unfair prices and set a new price.

MPs who last week approved the amendment said this was a necessary step to protect tenants from unfair rental prices due to the current housing shortage. Those who voted against the amendment argued that this was a direct interference in the housing market, and that rental prices should be dictated by the market itself, and not the Rent Control board.

Criticism from National Housing Association

Bústaðir, the National Housing Association, which was involved in the consultation process, queries this new provision, arguing that the Rent Control Board already has the authority to process complaints about increased rental prices.

The housing association is concerned that the extended authority will lead to insecurity about rental price levels, which could act as a deterrent for investors.

“If investors cannot fix a rental price that covers their expenses and gives them a certain profit margin, the they may well hesitate to go ahead with the investment,” a Bústaðir spokesperson said.

Translated by prosa.fo