Appeals court revives 40 million kr apartment association claim

Iceland’s Court of Appeal has overturned a decision to dismiss an apartment owners’ association’s claim for more than 40 million krónur, ordering the Reykjavík District Court to hear the case on its merits, mbl.is reported.

The association for Höfðabakki 1 is seeking 40,389,507 krónur, plus interest, for unpaid association and maintenance charges from September 2025 through March 2026. It is also asking the court to confirm a legal lien on the property to secure payment.

The Court of Appeal’s ruling, issued on Tuesday, does not decide whether the amount is owed. The case concerns JB Eignir ehf., which sold the property to rental company Birta ehf. under an agreement signed on 28 December 2025 and registered the following day. The appeal court proceeded on the basis that the deed had not yet been issued, leaving both companies registered as owners.

The association directed its payment claim only at JB Eignir, but named both companies in its request to confirm the lien. The district court had ruled that both companies should have been included in the payment claim because they were jointly responsible for the charges, and dismissed the case on 18 September. It also rejected the lien request at that stage.

The Court of Appeal found that the companies were jointly and severally liable for the property’s share of common expenses from the date the sale agreement was registered. Before then, the payment obligation rested solely with JB Eignir. Because a creditor can seek full payment from either jointly and severally liable debtor, the association was entitled to pursue JB Eignir alone.

Both registered owners were required to be parties to the lien request, and the court found that the association had included them both and given them an opportunity to respond. It overturned the district court’s ruling and sent the case back for a hearing on its merits.