Estate agency paid buyer to avoid public naming

An Icelandic estate agency paid a buyer just over one million krónur over mould in a property, despite disputing responsibility, to avoid being publicly named for rejecting a ruling, mbl.is reported. The Association of Real Estate Agents later funded a court case to overturn the decision, which it feared could set a dangerous precedent.

On October 9, the Reykjavík District Court overturned a ruling by the Consumer and Service Purchase Complaints Board and ordered the buyer to repay the agency 1,208,778 krónur, plus default interest. The court made no order on legal costs.

Grétar Jónasson, executive director of the association, said the agency paid the compensation while reserving its position on whether the board’s ruling was correct. It did not want to risk being listed on the board’s website among sellers who do not accept its rulings. Regulations require the board to maintain and publish such a register, subject to certain conditions.

Jónasson said public naming could seriously affect an agency’s reputation, even when it believes a ruling is wrong. After reviewing the case, the association concluded that the decision could have wider consequences and decided to challenge it in court. He said this was the only case in which the association had intervened in this way.

The dispute began with a property purchase in January 2024. The estate agent had inspected the property the previous October, and the buyer took possession on April 15, 2024. Two days later, the buyer emailed the agent to report mould in one of the rooms.

The buyer argued that the agent had failed to meet disclosure obligations and said they had not been able to inspect the room properly. The agent denied that access had been restricted during the open house.

In November 2025, the complaints board ordered the agency to pay the buyer 1.1 million krónur. It found that the agent should have disclosed a leak and mould in the property’s sales particulars. Jónasson said the ruling concerned the agent’s duty to provide information and had raised concern, particularly because about six months passed between the inspection and the handover.

The agent had noted in the sales particulars that the upstairs windows were original. The house was built in 1981. The agent said he had not seen mould during the inspection.