General terms and conditions on plot allocation and plot fees

General terms and conditions on plot allocation and plot fees.

1. Plots

1.1. The Board of Directors of Faxaflóahafnir sf. decides on the allocation of plots owned by the company and sets the terms and conditions that apply at any given time. The plots of Faxaflóahafnir sf. are assigned to the name(s) of the applicant. All new plots that Faxaflóahafnir sf. allocates to users are either on landfills or land that has been formed and lowered to a certain ground level for construction and completion of plots.

1.2. Faxaflóahafnir sf. delivers to the plot holder a plot that has been filled and roughly levelled at a height of about 50 cm below the floor height of the house according to the published measurement and height schematics of the plot. Landfill material in the plot is load-bearing material, roughly levelled, but uncompressed. Where land is formed and blasted down, there is generally loose fill material on top of the rock, for levelling before allocation. Where there is a difference in height between the plots, the finishing of the plot boundaries is prepared with a gradient. This is also described in more detail in published measurement and topographical maps. The same applies where there is a difference in height between the plot and the adjacent footpaths and streets.

1.3. In special circumstances, the applicant may request to take over unaltered land at Grundartangi and take care of the necessary earthworks on the site. Such a request is subject to the approval of Faxaflóahafnir sf., as the plot size is 5 hectares or larger. Conditions for the approval of Faxaflóahafnir sf. are that drawings are submitted for approval by Faxaflóahafnir sf., stating how the plot will be finished.

1.4. The site owner cannot assume that the fillings under the building site meet all the requirements for a slab-load test without further actions, such as the finishing of a pillow lava pad under the foundations. In certain areas, land is filled in with thick sediments, and special measures must be taken with loading to ensure that building plots are safe for the foundation of buildings. These are time-consuming and costly measures, and it must be ensured during the preparation stage and when preparing the zoning of the site that technical information regarding load requirements, shape and type of buildings is available before the land is loaded. These actions are taken according to the criteria submitted by the site owner. If the site owner then requests relocations and changes to the location of the building and building sites after the loading is completed, the site owner shall bear the entire resulting costs.

1.5. The plot shall be specified in area and its shape according to schematics or local plan. There is a general obligation on plots for the pipes of Faxaflóahafnir sf. or utilities, as needed.

1.6.  The site owner is obliged to abide by the local planning terms, general allocation terms and building committee approvals and specific schematics regarding structures on the site, pipes, pipelines and the finishing of the site. The site owner receives the plot as when it is handed over. The site owner is obliged to abide by the terms and conditions of Faxaflóahafnir sf. that apply to the plot.

2. Plot fee

2.1. Plot fees are calculated per square metre of plot, so it is generally assumed that the utilisation of the plot as a base area is 0.5, but with middle platforms of 0.6 and the house height according to the defined height in the planning terms and conditions. Plot fees (sale price of construction rights) include the cost of making the plot buildable, including for street construction. In addition to the plot fee, the site owner pays for the utility mains (sewage and rainwater pipes) and mains for water and electricity, building permit evaluation and measurement fees, according to the tariffs of the relevant parties.

Plot fees vary according to the location, and the amount is decided by the Board of Directors of Faxaflóahafnir sf. In the event that the local plan of the site or the local plan of the area is changed, according to the decision of the Board of Directors of Faxaflóahafnir sf. or at the request of the site owner, so that the utilisation rate of the building on the site exceeds 0.6 or that land use other than for business activities is permitted, Faxaflóahafnir sf. reserves the right to impose an additional plot fee on the site owner so that the total plot fee for the plot in question amounts to up to twenty times the plot fee for a commercial plot. In such cases, the Board of Directors of Faxaflóahafnir sf. decides what the additional plot fee shall be, taking into account the market value of building rights in Reykjavík.

2.3. A confirmation fee for plots in Sundahöfn and Grundartangi, which is 25% of the total plot fee plus VAT on the total plot fee, must be paid within one month of the allocation. The balance is paid with a mortgage bond with a first rank lien for the relevant plot, which the site owner shall issue before the delivery of the plot. The bond shall be indexed based on the consumer price index (basic index according to the contract), with 10 instalments every 6 months.

A confirmation fee for plots in the Old Harbour and Grundartangi, which is 50% of the total plot fee plus VAT on the total plot fee, must be paid within one month of the allocation. The balance is paid with a mortgage bond with a first rank lien for the relevant plot, which the site owner shall issue before the delivery of the plot. The bond shall be indexed based on the consumer price index (basic index according to the contract), with 10 instalments every 6 months. In addition, the site owner shall pay a street construction fee to the City of Reykjavík, which shall be paid according to the tariff and rules of the City at any given time.

The site owner shall, within 3 months, submit building committee schematics to the Reykjavík City Building Committee.

If the confirmation fee has not been paid within two months of the notification of payment, the allocation will be cancelled without special notice.

2.4. Return of the plot is subject to the approval of Faxaflóahafnir sf. If the Board of Directors of Faxaflóahafnir sf. agrees to the plot being returned, the plot fee is refunded in the same way and on the same terms and conditions as applied to its payment to Faxaflóahafnir sf., less a management fee, which amounts to 1% of the levied plot fee, and less plot rent and other fees that may relate to the plot. The reimbursed plot fee is indexed based on the consumer price index up until the time the repayment takes place, but it does not bear interest. The refunded plot fee is not subject to VAT. The site owner agrees to the free registration of the site with his signature, under these terms and conditions, and the plot rent invoices will therefore be subject to VAT.

3. Time limits

3.1. Site owners are obliged to comply with the following time limits for construction:

a)  The main schematics of the buildings must have been submitted to Faxaflóahafnir and/or the Planning and Building Committee for approval no later than 3 months after the site is ready for construction.

b)  Foundations and slabs shall be cast no later than 12 months after the site is ready for construction.

c)  The building shall be completed on the outside in accordance with approved main and specific schematics, the plot roughly levelled to the correct height, dust-bound, and the boundaries to other plots, streets or open areas delineated within 3 years from the site being buildable.

d) No later than 3 years after the site is ready for construction, the site owner shall have completed the surface of the site and all finishing at the site boundaries in accordance with the approved main and specific schematics.

3.2. The plot is considered ready to build on when Faxaflóahafnir sf. authorises construction on the site or formally announces that construction may begin. The site owner must proceed with the construction at a normal speed in the opinion of Faxaflóahafnir sf. and complete it within a reasonable time frame. If the site owner fails to fulfil obligations under the provisions of this article, or does not otherwise comply with these terms and conditions, incl. payment of a plot fee, Faxaflóahafnir sf. is authorised to recall the allocation of the plot. The site owner shall then be paid compensation for any structures that may be on the plot according to an assessment.

3.3. Faxaflóahafnir sf. is not responsible for any delays that may occur in the construction work of the site by the site owner in relation to construction facilities not being adequate, e.g. if streets, water or sewer pipes are incomplete. The deadline according to paragraph 1 can be extended by the amount of delay that is verifiably due to this reason.

3.4. The site owner shall ensure that the general conduct and orderliness during the construction period is as good as possible and that nothing is stored on the site other than that relating to the construction. The site owner shall always clean up the site during the construction period so that there is no risk of adjacent sites being damaged due to wind or other reasons. Any negligence of the site owner in fulfilling this provision authorises Faxaflóahafnir sf. to take appropriate measures at the expense of the site owner without special notice.

4. Plot rent

4.1.  A site lease agreement shall be made when the foundations of the building and the foundation slab have been concreted. The site lease agreement is made for a period of 25 years.

Plot rent is based on the real estate appraisal of the plot. The annual plot rent is decided by the Board of Directors of Faxaflóahafnir sf. and is now 2.35% of the real estate appraisal of the plot.

Collection of plot rent begins three months after the allocation of the plot, provided that the plot is ready for construction. If a plot is not suitable for construction at the time of allocation, the plot rent is paid from the time Faxaflóahafnir sf. considers it ready for construction.

If, for some reason, a site lease agreement has not been made when the payment of the plot rent is to begin, the site owner is still obliged to pay the plot rent in accordance with the rules of Faxaflóahafnir sf.

4.2. Special provisions apply to the rent of cargo terminals or equivalent land areas.

4.3. Mortgaging or transferring the right to a plot or construction right on the allocated plot before a site lease agreement is issued is not permitted except in exceptional cases and special cases, provided that a written approval by Faxaflóahafnir sf. is available. As soon as a site lease agreement is signed, an insurance bond shall be issued and notarised with a mortgage on the site in question, together with the structures that are erected on the site. The amount of the bond shall correspond to a two-year estimated plot rent and be used as security for unpaid rent, together with interest and the cost of collecting it. If the rent is not paid on the correct due date, the lessee shall pay penalty interest on his arrears in accordance with the Act on Interest and Indexation No. 38/2001.

5. Taxes and obligations

The lessee pays, as of the allocation of the plot, all taxes and duties, incl. real estate taxes levied on the site by public entities and any fees that are or will be imposed on the leased site and structures on it, at no cost to Faxaflóahafnir sf.

6. Type of plot

If the plot is leased to the lessee as a commercial plot, the lessee is not permitted to change its use without the prior consent of Faxaflóahafnir sf.

7. Use by third parties

The lessee is not permitted to allow other individuals, institutions or companies to construct buildings on the site, move houses to it or build other structures on it. The lessee is also not permitted to transfer or otherwise hand over parts of this plot to individuals, institutions or associations.

8. Restoration

If the lessee tears down an entire building on the plot or it burns to the ground, then his leasehold right to the plot expires if he has not built a house on the site two years after the house burned down or was demolished.

9. End of rental period

If the Board of Directors of Faxaflóahafnir sf., at the end of the lease term, does not wish to renew the lease agreement, the company shall pay the lessee the true value of the building or buildings by agreement or valuation, provided that the real condition of the buildings is fully taken into account in the valuation. If the lease term of the site lease agreement has expired without a new lease agreement having been entered into, the payment obligation and liability of the site owner shall remain in force while the lessee occupies the site.

10. Change in the plot schematics

If the plot boundaries do not in fact prove to be in full accordance with the current site lease agreement, making it necessary to make minor changes to the boundaries and to the plot size according to what is stated in the agreement, Faxaflóahafnir sf. may unilaterally register new plot schematics and change the plot size, cf. paragraphs 1 and 14.

11. Registration

The lessee pays the cost of registering the lease agreement and the stamp duty.

Thus approved by the Board of Faxaflóahafnir sf. 8 November 2013
Gísli Gíslason, Port Director