The buyer obtains a non-encumbrance certificate from the Land Registry
Agency: Magistrate’s Office
The buyer requests to receive a certificate of mortgages and other possible rights and obligations in relation to the property. Anyone can request a certificate in writing. It costs ISK 1.500 and it takes one visit to the Icelandic Property Registry. Real-estate agencies have on-line access to this information at a cost of ISK 850 per certificate. Other due diligence checks are performed using online databases of the Property Registry and Land Registry under the Icelandic Property Registry.
Some of the checks include:
- A list of options, purchase rights, and warrants issued by the Company specifying the name of the holder, rights or warrants issued, the date granted, the purchase price, and the position of the holder with the Company;
- An address list of the locations of all land, buildings, and other improvements either leased or owned by the Company;
- Status of properties owned (eignastöðuvottorð) and the history of properties owned (eignasöguvottorð).
Time and cost: Less than one day (online), ISK 7,246
- ISK 850 each mortgage certificates if completed online (ISK 1,500 at the Registry office) * 2 required
- ISK 700 for certificate from the Property Registry
- ISK 630 for online certificate of status (eignastöðuvottorð)
- ISK 2,900 (for physical certificate)
- ISK 66 ownership history
- ISK 1250 Certificate from the National Register
Authorized real estate agent prepares and executes the sale-purchase agreement
Agency: Real Estate Agent
It is not mandatory to use an authorized real estate agent, but almost everyone does. The agent’s fees will be around 1.5% and 2.5% of the property value. The sale-purchase agreement is usually registered at the Property Registry if the property is not paid in full at the time of the agreement. The deed is first signed when the property is paid in full. Registration of the sale-purchase agreement protects the rights of the purchaser. The total extra cost of registering the sale-purchase agreement is ISK 2.000.
The process takes about 2 days. In this case there is no need to register the sale-purchase agreement and it is not a formal requirement.
The conditions for registry of the sale purchase agreement are that it contains the following information:
- The name of the property as officially registered by the municipal authorities;
- Unique property reference number of the land and the property;
- The legal description set forth by the planning and building authorities;
- The land and the building’s number which has direct reference to its coordinates.
This information can be obtained from the Land Registry office in the property’s district or from Icelandic Property Register (Cadaster authority). If an authorized real estate agent handles the sale, this information is available to him via an electronic data and information system. It is common that the buyer notifies the insurance company. Insurance companies have electronic access to the database at Icelandic Property Register and there is a daily processing of the title of transfers. The title of the fire-insurance changes the same day as the transfer of title is registered.
Time and cost: 1 day, ISK 6,759,746.02 (1.5-2.5% of property value (real estate agent fees))
Transfer of title is prepared and registered at the Magistrates office
Agency: Magistrate’s Office and Associates of attorney’s
When the buyer has fulfilled his obligations in relation to the sale purchase agreement and the conditions for registrations, the transfer of title is prepared and registered at the Magistrates office. The deed shall be delivered in two signed copies (including one copy on a special accredited paper). The documentation should include the deed signed by the seller and the purchaser and certified by a notary public, or an attorney, a certified real-estate agent or two witnesses. In practice a notary public is hardly ever used.
Time and cost: 2 days, ISK 5,410,296.82 (ISK 2.500 + 0,8% (individuals) or 1,6% (companies) of the official property value (usually lower than purchase price) for Stamp Duty)