Chapter I
Legal Competence
Section 1
Legal Competence
1. A person shall become legally competent when attaining the age of 18 years. A legally competent person shall be competent to manage his or her personal and financial affairs.
2. A person not legally competent by reason of minor age who enters marriage shall be legally competent as from when the marriage takes place.
Personal Competence
Subject to other provisions of law, a person possessing personal legal competence shall be competent to manage any of his or her personal affairs other than financial affairs.
Financial Competence
Subject to other provisions of law, a person possessing financial legal competence shall be competent to manage any of his or her financial affairs.
Deprivation of Legal Competence
Section 4
Conditions for Deprivation of Legal Competence, etc.
By judicial decision a person can, if necessary, be deprived of legal competence, personal competence alone, financial competence alone, or both:
a. If he or she is unable to manage his or her personal or financial affairs by reason of mental debility, old age infirmity or mental disease, or by reason of other serious health condition.
b. If he or she is, as a result of excessive use of alcohol or drugs of habituation or dependence, unable to manage his or her personal or financial affairs.
c. If he or she is not able to manage his or her personal or financial affairs in a satisfactory manner by reason of physical disability, health failure or other impairment, and therefore decides to request deprivation of legal competence.
d. If the provisions of health care legislation make it necessary to commit the person in question to a hospital without his or her approval.
Limited Deprivation of Legal Competence
1. A person can be deprived of legal competence for a limited period of time if deprivation unlimited in time is not considered necessary. Such time-limited deprivation of legal competence shall however not be ordered for more than six months at a time. Time-limited deprivation of legal competence shall be automatically cancelled at the end of the period of deprivation if a request has not been submitted in court for its continuation or for deprivation unlimited in time. In such cases the time-limited deprivation shall be extended until the decision of a judge has been rendered.
2. A person can be deprived of financial competence in relation to particular property, for a definite period of time or indefinitely. This shall be limited to:
a. Real property, aircraft, and ships and vehicles for which registration is required;
b. negotiable instruments, and
c. money on deposit accounts with commercial banks and savings banks, and shares owned in securities funds.
The provisions of this Act on deprivation of personal competence and its legal effects shall also apply to time-limited deprivation of personal competence in accordance with paragraph 1. The provisions of this Act on deprivation of financial competence and its legal effects shall also apply to time-limited deprivation of financial competence in accordance with paragraph 1 and, unless a different arrangement is provided for, also to deprivation of financial competence in accordance with paragraph 2.
Provisional Deprivation of Legal Competence
1. After a request for deprivation of legal competence has been submitted to the court in question in accordance with the other provisions of this Chapter, a person may be provisionally deprived of legal competence if the conditions provided for in Section 4 are deemed fulfilled and deprivation of legal competence is urgently needed.
2. The provisions of this Chapter shall apply to cases where provisional deprivation of legal competence is requested. The provisions of Section 10 paragraph 3, on the duty of a judge to afford the respondent an opportunity to request the appointment of a particular defence counsel, the provisions of paragraph 4 of that Section, and the provisions of Section 11 paragraphs 1, 2 and 4 shall however only apply to the extent their application does not prevent the possibility of an immediate deprivation of legal competence.
3. A decision of provisional deprivation of legal competence shall be taken in the form of a court order that can be referred to the Supreme Court, cf. Section 16.
4. Provisional deprivation of legal competence shall remain in effect until the decision of a judge in a case involving a request for deprivation of legal competence becomes effective, the procedure is terminated, or until the decision on provisional deprivation of legal competence is removed from effect by a new court order.
5. The provisions of this Act on the legal effects of a deprivation of legal competence shall also govern the legal effects of a provisional deprivation of legal competence.
The Parties to a Case Involving a Request for Deprivation of Legal Competence
1. The person against whom a request for deprivation of legal competence is directed shall be the respondent.
2. The party requesting deprivation of a person's legal competence shall be he plaintiff. The plaintiff in a case involving a request for deprivation of legal competence can be:
a. The respondent's spouse, his or her relatives by direct descent, and siblings.
b. The respondent's guardian or administrator.
c. The respondent's nearest successor under the law of inheritance or an irrevocable testamentary disposition.
d. The social security office or a corresponding municipal authority at the respondent's place of stay at the time a request for deprivation of legal competence is considered advisable as a result of his or her own petition or that of his or her next of kin, physician or friends, or by reason of knowledge of his or her situation otherwise obtained.
e. The Minister of Justice, if recommended by the public interest.
3. A person can also request his or her own deprivation of legal competence.
Form and Content of a Request for Deprivation of Legal Competence
1. A request for deprivation of legal competence shall be made in writing. There, the following shall be stated:
a. The name, National Registry number and legal domicile of the plaintiff.
b. The name of the respondent, his or her National Registry number and legal domicile, and his or her place of stay, if other than the legal domicile.
c. Whether the request is made for deprivation of personal competence, financial competence, or both.
d. If temporary deprivation of legal competence is requested, the period of time for which this is requested.
e. If deprivation of financial competence in relation to particular property is requested, an exact specification of the property or properties.
f. The names and addresses of the respondent's spouse or cohabiting partner, his or her legally competent children and parents, and information on whether those persons know of the request.
g. The name of the respondent's family physician and of any medical consultants he or she may have consulted, if known, provided their written opinions are not attached to the request.
h. The reasons why deprivation of legal competence is requested.
i. The legal basis for the plaintiff's status as a party to the case.
2. If possible, medical certificates and other documentary evidence in support of the request shall be attached.
Venue
A request for deprivation of legal competence or cancellation of such deprivation shall be submitted to the district court in the district of the respondent's legal domicile. If the respondent has a fixed place of stay elsewhere, the request shall however be submitted to the court having jurisdiction there. If neither the respondent's legal domicile nor his or her fixed place of stay is known, the request shall be submitted to the District Court of Reykjavík.
Procedure
1. Subject to the other provisions of this Act, a request for deprivation of legal competence shall be subject to the general procedure in civil cases.
2. The judge shall commence the procedure in a case involving a request for deprivation of legal competence as soon as possible.
3. The judge, having afforded the respondent an opportunity to request a specific person for that function if this is not obviously meaningless, shall appoint a counsel for the respondent as provided for in the Code of Criminal Procedure. The appointment of counsel for the respondent shall however not be necessary if the respondent has retained a professional lawyer to guard his or her interests. The judge may also appoint a representative the plaintiff if the plaintiff so requests.
4. The judge shall, when an investigation of the facts has been completed, afford the parties an opportunity to present their views orally before the case is received for a resolution.
5. Court sessions in cases involving a request for deprivation of legal competence shall take place in camera.
6. The judge shall proceed as expeditiously as possible with any case involving a request for deprivation of legal competence.
7. The plaintiff can withdraw his request at any stage of the proceedings.
Investigation
1. The judge shall ensure that the facts of the case are adequately clarified before rendering a decision on deprivation of legal competence.
2. The judge may collect evidence on his or her own accord, such as medical certificates, if such evidence has not been submitted with the request made, and any other evidence as he or she may consider necessary. The judge shall summon the respondent to appear in court, explain the request to the respondent, and afford the respondent an opportunity to express his or her views thereon, except if the respondent's condition, according to a provided medical certificate, renders this meaningless. The judge shall summon the plaintiff and any witnesses to appear in court if needed.
3. If the respondent does not heed the judge's summons to appear, the judge can ask for police assistance to fetch the respondent. Police have the duty to carry out such instructions of a judge.
4. If the respondent can not be summoned to appear, the judge shall go to the respondent's place of stay and personally ascertain the respondent's condition. This shall however not be necessary if it is established by a medical certificate or other evidence that this is of no significance for the outcome of the case.
5. If the judge considers necessary, he or she may decide to prevent the respondent from being present when the statements of the plaintiff and witnesses are received, in part or in their entirety. The respondent shall however always, before a decision on deprivation of legal competence is rendered, be made familiar with any relevant statements received, except if this is obviously meaningless or in conflict with the interests that led to the judge's decision taken in accordance with this paragraph.
6. Any person, who in the course of his or her profession has obtained information concerning the respondent, which the judge considers of relevance for the outcome of the case, has the duty of providing that information to the judge and delivering to the judge any evidence the judge may require. The same shall apply to any other persons who by reason of their ties to the respondent can provide comparable information.
Resolution
1. A person shall only be deprived of legal competence to the extent the judge considers necessary in each case.
2. The judge shall resolve the matter by a court order within three days from when the matter is received for a resolution.
The Legal Effects of a Court Order on Deprivation of Legal Competence
1. The legal effects of a court order on deprivation of legal competence shall commence at the time it is pronounced.
2. With respect to the respondent and any other person knowing or reasonably deemed to know of an order of deprivation of legal competence, the legal effects of the order shall commence at the time it is pronounced.
3. The legal effects of an order involving deprivation of financial competence with respect to a third party in good faith shall be governed by the provisions of Section 76 paragraphs 2 and 3.
Notification, registration, etc.
1. No matter brought to light in a case involving deprivation of legal competence may be made publicly known, except the court order. A violation of this provision shall be punishable by fine.
2. The respondent's counsel shall as soon as possible inform the respondent of the judicial conclusion of case where deprivation of legal competence has been requested. This shall however not be necessary if obviously meaningless by reason of the respondent's condition.
3. The judge shall, as soon as possible, send a confirmed transcript of any court order involving deprivation of legal competence, by registered letter or in a similarly secure manner, to the Ministry of Justice. The judge shall also send a confirmed transcript of the order in the same manner to the supervisor of guardians in the district where the person deprived of legal competence has his or her legal domicile or fixed place of stay, if other than the legal domicile, with the information necessary to enable the supervisor of guardians to perform the duties provided for in paragraph 4. If neither the legal domicile nor a fixed place of stay is known, the transcript shall be sent to the supervisor of guardians in Reykjavík. The judge shall furthermore have the conclusion of a court order involving deprivation of financial competence, which is not limited to particular property, published in the Government Gazette. Such publication shall take place as soon as possible.
4. The supervisor of guardians shall, immediately after a court order involving deprivation of financial competence has been received, take the following measures:
a. If the person deprived of financial competence is the registered owner of real property or aircraft, or of a vehicle or ship subject to registration, the court order shall be registered in the records of the property in question. No recordation charges shall be payable on this account.
b. If the person deprived of financial competence is owner of a negotiable instrument, the deprivation shall be noted on the instrument. This shall also apply to any negotiable instruments a guardian may purchase later on behalf of that person.
c. If the person deprived of financial competence operates a business, which is, or shall be, registered in the registry of firms, the deprivation shall be noted there.
d. If the person deprived of financial competence is the owner of deposits on accounts in commercial banks or savings banks, the relevant institution shall be notified of the deprivation of financial competence by a registered letter or in other manner offering proof. This shall also apply to shares owned in securities funds. If the person deprived of legal competence owns shares in a company, the board of the company shall be notified in the same manner.
5. If deprivation of financial competence is limited to particular property, the duties provided for in paragraph 4 shall only pertain to that property.
6. The Ministry of Justice shall maintain a registry of persons deprived of legal competence.
Cancellation of Deprivation of Legal Competence
1. A person who according to the provisions of Section 7 can be a party to proceedings where deprivation of legal competence is requested considers that the reasons underlying such deprivation do no longer apply, can request the district court to cancel the deprivation in part or in whole by a court order.
2. If such request is made by the person deprived of legal competence, the judge shall only be obliged to proceed with the request if at least six months have passed since the deprivation took place. In case of a deprivation ordered for twelve months or a shorter period, the judge shall only be obliged to proceed with the request if at least one half of the period of deprivation has passed.
3. A request for cancellation of deprivation of legal competence shall be made in writing, reasoned, and if possible supported by evidence of a changed situation of the person deprived.
4. Procedure concerning a request for cancellation of deprivation of legal competence shall be governed by the provisions of Section 8 as applicable, Section 9, Section 10 paragraphs 1-6 incl., Section 11, Section 12, Section 14 paragraphs 1 and 2, Section 16, paragraphs 1, 3 and 4, and Section 17.
5. If the decision of a judge in a case involving a request for cancellation of deprivation of legal competence changes or cancels the deprivation, its notification and registration shall be governed by the same rules as provided for in Section 14 paragraphs 3-6 incl.
Appeal
1. Court orders rendered in accordance with this Act shall be subject to summary appeal to the Supreme Court. The appeal shall, subject to the other provisions of this Act, be governed by the general rules on procedure in private litigation.
2. Appeal shall only suspend the legal effects of a court order providing for deprivation of legal competence if the judge has provided for such suspension in the decision rendered.
3. The Supreme Court shall proceed with the matter as expeditiously as possible.
4. A certified transcript of the Supreme Court's judgment shall be sent the Ministry of Justice and the district court judge of the case. If the district court's order is changed by the Supreme Court, the district court judge and the other authorities referred to in Section 14 paragraphs 3-6 of this Act shall take the measures provided for there.
Legal Costs
1. The remuneration of the counsel appointed for the respondent and the representative appointed for the plaintiff, and any other legal costs, including cost of obtaining medical certificates and other expert evidence, shall be paid by the State Treasury.
2. If appeal to the Supreme Court is obviously groundless, the appellant may be ordered to refund the costs of appeal to the State Treasury.
Involuntary Commitment
Section 18
Involuntary Commitment
In this Act, 'involuntary commitment' refers both to the transfer of a legally competent person to a hospital against his or her will followed by detention there, and to continued detention in hospital of a person against his or her will, who has been staying in a hospital of his or her own free will.
Conditions for Involuntary Commitment, etc.
1. A person possessing personal legal competence can not be committed to a hospital against his or her will.
2. However, a physician may decide to have a person possessing personal legal competence transferred to a hospital against his or her will, if the person in question suffers from a serious psychotic disorder or if this is deemed highly probable, or if the person's condition is reasonably deemed analogous to that leading from such disorder. This shall also apply if a person suffers from a serious craving for alcohol or excessive use of drugs of habituation and dependence. The provisions of Section 18 of the Administrative Procedures Act shall not apply to procedure under this paragraph. If a hospital physician in charge of reception takes a decision of involuntary commitment, that decision shall be referred to the chief physician as soon as possible. Deprivation of liberty according to this paragraph may not last longer than 48 hours, except if the Ministry of Justice has granted its approval as provided for in paragraph 3.
3. If approved by the Ministry of Justice, a person possessing personal legal competence can be committed to a hospital against his or her will for treatment for a period not exceeding 21 days following the date of the Ministry's approval, provided the reasons mentioned in paragraph 2 apply and involuntary commitment is, in the opinion of a physician, unavoidable.
4. Police have the duty of granting a physician's request for assistance for transferring a person to a hospital against his or her will as envisaged in paragraphs 2 and 3, and the physician shall in such a case accompany the person to the hospital if this is deemed necessary.
5. The Minister for Public Health shall, by administrative regulations, list the hospitals authorised to receive persons committed as provided for in paragraphs 2 and 3.
Parties Competent to Request Involuntary Commitment
A request for involuntary commitment of a person to a hospital as provided for in Section 19 paragraph 3 can be submitted by the parties enumerated in Section 7 paragraph 2, subparagraphs a, b and d.
Form and Content of a Request for Involuntary Commitment, and Attached Evidence
1. A request for involuntary commitment according to Section 19, paragraph 3, shall be in writing, addressed to the Ministry of Justice. The request shall generally be submitted on a form supplied by the Ministry.
2. The following information shall be supplied in the request:
a. The name, National Registry number and legal domicile of the person making the request.
b. The name, National Registry number and legal domicile of the person whose commitment is requested, and his or her place of stay, if other than the legal domicile.
c. The relationship or ties between the requesting person and the person whose commitment is requested.
d. The reasons for the request.
e. The hospital to which the person in question is to be committed, and, as applicable, the hospital ward.
3. The request shall be accompanied by a medical certificate, which shall, except in special circumstances, have been prepared within three days prior to the Ministry's reception of the request. In the certificate, which shall generally be made out on a form supplied by the Ministry, the following shall be stated:
a. The name of the person whose commitment is requested, his or her National Registry Number and legal domicile, and his or her place of stay, if other than the legal domicile.
b. The place and time of medical examination.
c. A physician's description of the mental and physical condition of the person in question.
d. The physician's diagnosis, if available.
e. The stand taken with respect to the request by the person whose involuntary commitment is requested, as may be practicable.
f. The physician's statement to the effect that involuntary commitment is, in his or her opinion, necessary.
g. The date of the certificate and the physician's signature and identification stamp.
4. The cost of the medical certificate shall be paid by the State Treasury.
Procedure at the Ministry of Justice
1. The Ministry of Justice shall, as soon as a request for involuntary commitment is received, process the request. If a decision on the request can not be taken on the basis of the request itself and the attached medical certificate, the Ministry shall collect any information it deems needed.
2. The provisions of Sections 13, 14 and 18 of the Administrative Procedures Act shall not apply to the processing of a request for involuntary commitment.
3. When the necessary evidence and information has been collected, the Ministry shall decide without delay whether the request for involuntary commitment is granted or denied.
Consultant Physician of the Ministry of Justice
1. The Ministry of Justice shall engage a consultant physician to provide the Ministry, when necessary, with an opinion before a request for involuntary commitment is granted.
2. The Ministry's consultant physician shall at any time be entitled to examine the condition of a person who as been committed to hospital against his or her will, and to examine his or her medical journal.
The Decision of the Ministry of Justice
1. The decision of the Ministry of Justice on whether to grant or deny a request for involuntary commitment shall be in writing and reasoned, and shall be notified to the party making the request. If the request is granted the decision shall also immediately be notified the chief physician of the hospital in question in a secure manner, with a photocopy of the medical certificate that accompanied the request.
Notification of the Legal Status of a Committed Person
1. The physician in charge at a hospital at the time a person is received for involuntary commitment shall notify that person of the following without delay, provided this is not obviously meaningless by reason of his or her condition:
a. The reasons for involuntary commitment.
b. The right to the services and support of a councillor as provided for in Section 26.
c. The decision of the Ministry of Justice taken in accordance with Section 19, paragraph 3, if applicable.
d. The right to refer the decision of involuntary commitment or a decision on involuntary administration of medical preparations or medical treatment to the courts as provided for in Section 30.
2. The chief physician shall control and be responsible for the observance of the provisions of paragraph 1.
3. The Minister of Public Health is empowered to issue rules in further detail on notification of the legal status, as provided for in this Section, of persons subject to involuntary commitment.
Councillors in Cases of Involuntary Commitment
1. A person subject to involuntary commitment is entitled to the counsel and support of a specially appointed councillor on account of the commitment to hospital and the treatment afforded there.
2. The physician in charge of the shift shall, if the person subject to involuntary commitment so requests, contact the councillor as soon as possible and notify the councillor of the commitment. The committed person is entitled to discuss any matter relating to the involuntary commitment in private and to contact the councillor regularly, provided the patient's condition does not render this meaningless. The councillor is entitled to examine the medical journal of the committed person.
3. The councillor is obliged to keep confidential any matter he or she may discover in the course of his or her functions or on the account thereof, to which Section 18 of the Act on Rights and Duties of State Employees applies. Any breach of this duty shall be punishable as provided for in Chapter XIV of the General Penal Code.
4. The State Treasury shall pay the remuneration of a councillor specifically engaged to render assistance to persons subject to involuntary commitment.
5. The Minister of Justice shall issue rules in further detail on the engagement of councillors as provided for in this Section, their rights, duties and remuneration.
The Hospital Treatment Afforded a Person Subject to Involuntary Commitment
1. A person committed involuntarily to hospital without approval of the Ministry of Justice having been obtained can only be subjected to involuntary administration of medical preparations or involuntary medical treatment if the conditions set in paragraph 3 of this Section are fulfilled. The provisions of paragraph 3 shall also apply in other respects in such cases.
2. A person involuntarily committed to hospital for treatment with the approval of the Ministry of Justice shall only be subjected to involuntary administration of medical preparations in accordance with a decision of the chief physician. This shall also apply to any other involuntary treatment.
3. The physician in charge of a shift can however decide that a person subject to involuntary commitment shall be subjected to involuntary administration of medical preparations or other involuntary treatment if the patient presents a danger to himself or others, or if the patient's life or health is else endangered. Any decision on involuntary administration of medical preparations or other involuntary treatment shall in such cases be notified the chief physician as soon as possible, and the chief physician shall decide on any further treatment.
4. The Minister of Public Health is empowered to issue rules in further detail on involuntary administration of medical preparations or other involuntary treatment as provided for in this Section.
Termination of Involuntary Commitment
1. A person's involuntary commitment may never last longer than the chief physician considers necessary, and in any case not longer than 48 hours, cf. Section 19 paragraph 2, unless approved by the Ministry of Justice. Involuntary commitment approved by the Ministry of Justice may never last longer than the chief physician considers necessary, and in any case not longer than 21 days from the date of the Ministry's approval, cf. Section 19 paragraph 3 of this Act.
2. The period of a person's involuntary commitment may however be extended if a request for deprivation of his or her personal legal competence has been submitted in court. When a request for deprivation of personal legal competence of a person subjected to involuntary commitment has been submitted, the judge shall, without delay, notify the chief physician at the hospital where the person is staying that such a request has been submitted and of the time when it was submitted. This shall be done by telegram or in some other secure manner.
The Right of a Person Possessing Personal Legal Competence to Refer a Decision of Involuntary Commitment or Involuntary Hospital Treatment to the Courts
1. A person who has been involuntarily committed to a hospital against his or her will as provided for in Section 19 paragraphs 2 or 3, can refer the decision of the commitment to the courts.
2. A person who has been subjected to involuntary administration of medical preparations or other treatment as provided for in Section 28 can refer the decision to do so to the courts.
3. An application in accordance with paragraphs 1 or 2 shall be made in writing and addressed to the court in question. It shall be stated whether the appointment of a representative is requested, and if so, the name of the representative. The councillor shall assist in formulating the requests made, if wanted, and make certain that the court receives the application immediately.
Procedure in Court
1. The judge shall without delay initiate legal procedure relating to any application made in accordance with Section 30. The judge shall appoint a representative for the applicant as provided for with respect to defence counsels in the Code of Criminal Procedure, and shall afford the applicant an opportunity to request the appointment of a particular representative, if such a request has not already been made.
2. If a request is made for cancellation of involuntary commitment as provided for in Section 19, paragraph 2, or for cancellation of a decision on involuntary administration of medical preparations or other treatment as provided for in Section 28, the judge shall without delay notify the chief physician of the relevant hospital ward of the request. The chief physician shall immediately provide his observations to the judge, explaining the reasons for involuntary commitment or involuntary administration of medical preparations or other treatment, as the case may be.
3. If a request is made for cancellation of involuntary commitment that has been approved by the Ministry of Justice, the judge shall notify the Ministry of the request, and the Ministry shall provide the judge with the evidence on which its approval was based, and its observations, as the case may be.
4. Procedure shall in any other respects be governed by Chapter II of this Act, as applicable.
5. The judge shall as soon as possible resolve whether the decision on involuntary commitment or involuntary administration of medical preparations or other involuntary treatment is upheld or annulled.
6. When an approval of the Ministry of Justice is requested for involuntary commitment of a person who is detained in an hospital according to a physician's decision, the Ministry shall, if the physician's decision has been referred to the courts, notify the court in question of the request without delay, and of the outcome of the matter when the Ministry has taken its decision. Procedure in court shall not suspend the Ministry's examination of the matter.
The Right of Compensation of a Person Subject to Involuntary Commitment
1. The State Treasury shall be ordered by judgment to pay compensation on account of the involuntary commitment of a person possessing personal legal competence if the conditions set by law for such a measure have been absent, the measure has been of a longer duration than necessary, or if the measure has been carried out in an unnecessarily dangerous,
hurtful or offensive manner.
2. Compensation shall be awarded for financial and non-financial loss, as applicable.
3. The general principles of the law of torts shall apply in any other respects.
Administrators
Section 33
Conditions for Appointment of an Administrator
A person possessing financial legal competence who is not able to manage his or her financial affairs in a satisfactory manner by reason of illness or disability can request the appointment of an administrator, provided the he or she is aware of the significance of such a measure.
Form and Content of a Petition for Appointment of an Administrator
1. A petition for appointment of an administrator shall generally be submitted on a form supplied by the supervisor of guardians.
2. In the petition, the following shall be stated:
a. The name, National Registry number and legal domicile of the petitioner, and his or her place of stay, if other than the legal domicile.
b. If the petitioner is married or cohabiting the name of the spouse or cohabiting partner shall be stated, and an account given of the stand taken by the spouse or cohabiting partner with respect to the petition.
c. The reasons why appointment of an administrator is requested.
d. An exact enumeration of the property to be administered.
e. If appointment of a particular administrator is requested, the identity of that person shall be stated.
2. A medical certificate shall be attached to the petition, explaining the petitioner's health condition and the physician's opinion whether the petitioner is aware of the significance of the measure as required by Section 33.
Property Subject to Administration
An administrator can be entrusted with administration of the following property as provided for in this Chapter:
a. Real property, aircraft, and ships and vehicles for which registration is required;
b. negotiable instruments, and
c. money on deposit accounts with commercial banks and savings banks, and shares owned in securities funds.
Administrative Areas
The petition shall be addressed to the supervisor of guardians in the administrative area of the petitioner's legal domicile or place of stay.
Procedure
1. The supervisor of guardians shall decide on the petition without undue delay.
2. The supervisor of guardians shall provide the petitioner with the necessary assistance and guidance, including as regards the legal significance of the appointment of an administrator and the filling out of the petition form.
3. The supervisor of guardians shall ensure that the matter is adequately clarified before a decision is taken. He may instruct the petitioner to collect particular evidence, or collect it of his own accord. He shall for example examine on his own whether the petitioner fulfils the requirements made in Section 33.
4. If the petitioner has not requested appointment of a particular administrator, the administrator shall be selected in consultation with the petitioner.
5. If the petitioner is married, the spouse shall be offered an opportunity to express his or her views on the matter, including the selection of the administrator. The same shall apply to a cohabiting partner.
6. The petitioner can withdraw his or her petition at any stage. After an administrator has been appointed, his release shall be governed by the provisions of Sections 47 and 48.
Qualifications of Administrators
1. The provisions of Sections 53 and 54 shall apply to the general and specific qualifications to be fulfilled by administrators.
2. No person can be appointed to serve as administrator unless that person's approval has been obtained.
Decision to Appoint an Administrator, etc.
1. If the conditions set in Section 33 are fulfilled, the supervisor of guardians shall appoint an administrator for the petitioner. A single administrator can be appointed for spouses. This shall also apply to cohabiting partners.
2. An administrator shall not be entrusted with the administration of any other property than necessary with a view to the needs of the petitioner.
3. In particular situations two or more administrators can be appointed for the same petitioner, provided they do not administer the same property.
4. A decision to appoint an administrator shall be in writing, and include the following:
a. The name, National Registry number and legal domicile of the person for whom an administrator is appointed, and his or her place of stay, if other than the legal domicile.
b. The name, National Registry number and legal domicile of the appointed administrator.
c. The reasons for the appointment.
d. An exact statement of the property to be administered.
e. The remuneration of the administrator and the manner in which it shall be paid.
5. The supervisor of guardians shall issue a letter of appointment to the administrator, where a statement of the points mentioned in paragraph 4, subparagraphs a, b, and d, shall be included.
6. An administrator shall be appointed for a period unlimited in time.
Notification of the Appointment of an Administrator, and Registration of Administrators
1. The supervisor of guardians shall immediately send the letter of appointment to an appointed administrator, by registered mail or in some other equally secure manner. He shall also, in the same manner, send a confirmed copy of the letter to the administrator's client and to the Ministry of Justice.
2. When an administrator has been appointed, the supervisor of guardians shall immediately take the following measures:
a. If the administrator has been charged with the administration of real property or aircraft, or of a vehicle or ship subject to registration, the appointment shall be registered in the records of the property in question. No recordation charges shall be payable on this account.
b. If the administrator has been charged with managing a negotiable instrument, the appointment shall be noted on the instrument. This shall also apply to any negotiable instruments the administrator may purchase later on behalf of his client.
c. If the administrator has been charged with managing deposits on accounts in commercial banks or savings banks, the relevant institution shall be notified of this by registered mail or in some other equally secure manner. This shall also apply to shares owned in securities funds.
3. The Ministry of Justice shall maintain a registry of administrators and their clients.
Legal Effects of the Appointment of an Administrator
1. A person, having received a notification of the appointment of an administrator, is no longer entitled to manage, make dispositions concerning, or to undertake obligations on account of, the property committed to the administrator's charge. This shall however not affect the right to make testamentary dispositions.
2. The legal effects of the appointment of an administrator with respect to a third party in good faith are contingent upon that the measures provided for in Section 40, paragraph 2, have been taken.
3. Legal dispositions concerning property made by an administrator's client that are in conflict with the provisions of paragraph 1 shall not be binding upon the client unless the disposition has either been confirmed by the administrator or by the supervisor of guardians as the case may be, or if performance has been completed in a manner binding upon the client.
4. In addition to the provisions of this Chapter the provisions of Section 67 paragraphs 1 and 3, Section 68 paragraph 1, Section 77 paragraphs 1, 2 and 4, and Section 78 shall apply to any legal dispositions made by an administrator's client and an administrator's management of the client's property.
The Powers of an Administrator
1. Subject to other provisions of law, an administrator shall wield the same powers relating to the property committed to his care as those wielded by his client prior to the administrator's appointment. Any lawful disposition by an administrator relating to such property shall be binding upon his client.
2. An administrator can only provide a guaranty or other security for the benefit of a third party with a binding effect for his client if approved by the supervisor of guardians in writing.
3. An administrator can only sell or pledge real property, an aircraft or a ship subject to registration in the ownership of his client with the written approval of the supervisor of guardians. The same shall apply to lease of such property for a period exceeding three years, unless a right of termination is provided for on a suitable notice.
The Duties of Administrators, and Compensation Liability
1. The provisions of Section 60 paragraphs 1-3, and Section 61, shall apply to the duties of administrators in the performance of their functions and to their liability for compensation.
2. The Minister of Justice is empowered to issue rules in further detail on the functions and duties of administrators and on their supervision by the supervisor of guardians.
The Remuneration of Administrators
1. The supervisor of guardians shall, at the time an administrator is appointed, determine his remuneration with a view to the nature and extent of his work.
2. An administrator's remuneration shall be paid by his client.
3. An administrator and his client can both request a revision of the amount of remuneration to be paid the administrator.
Reports by an Administrator
1. Prior to the first day of March each year, each administrator shall make a report to the supervisor of guardians, on a form provided by the supervisor of guardians, of any significant decisions taken in the previous year concerning financial management and property administration on behalf of a client.
2. If financial management entrusted to an administrator is of extensive scope, or if particular reasons recommend it, the supervisor of guardians may decide to have an audit performed by a certified public auditor. The administrator's client shall pay the cost of such audit.
3. An administrator shall explain to the supervisor of guardians any measures taken, whenever the supervisor of guardians so requests.
4. When released from his duties, an administrator shall provide a report to the supervisor of guardians, on a form supplied by the supervisor of guardians, on the management of the funds and property of his client.
Changes in the Duties of an Administrator
1. An administrator's client may request changes by the supervisor of guardians as regards the property committed to the administrator's care.
2. Procedure in such cases shall be governed by the same rules as apply to the appointment of an administrator, as applicable.
Release of an Administrator
1. The supervisor of guardians shall release an administrator from his duties if the administrator so requests. The administrator shall however, if necessary, continue his functions until a new administrator has been appointed.
2. Subject to the provisions of Section 48, the supervisor of guardians shall release an administrator from his duties of his own accord if the conditions set in Section 33 no longer apply. This shall also be done if an administrator has neglected his duties or acted in violation of his duties, or if an administrator does no longer fulfil the conditions set in Section 54 paragraph 1.
3. An administrator's client can at any time request the administrator's release from his duties and a return of his property to his own care. The supervisor of guardians shall grant any such request unless the provisions of Section 48 apply.
4. The appointment of an administrator shall be automatically cancelled in case of the administrator's or his client's bankruptcy. If an administrator's client is deprived of financial competence, the appointment of the administrator shall be cancelled by the appointment of a guardian.
Deferred Consideration, etc.
1. If the supervisor of guardians has a reason to believe that the condition of a person for whom an administrator has been appointed is such as referred to in Section 4, the supervisor of guardians can, if the administrator's client requests a change or a cancellation of that arrangement, defer any consideration of that request for a period of seven days. At the end of that period the supervisor of guardians shall consider the request, provided a request for deprivation of financial competence has not been submitted in court. In such a case the supervisor of guardians shall defer the matter until the court has rendered a decision.
2. An administrator shall call the attention of the supervisor of guardians to any changes in his client's health condition that render the conditions set in Section 33 inapplicable. The supervisor of guardians shall then decide whether to release the administrator from his duties at once, or whether to wait for a decision on a request for deprivation of financial competence.
Notification of the Release of an Administrator from his Duties, etc.
1. An administrator and his client shall, by registered letter or by other means offering proof, be notified of any decision changing the administrator's duties or releasing the administrator from his duties. In case of the release of an administrator from his duties, the Ministry of Justice shall be notified in the same manner.
2. The supervisor of guardians shall as soon as possible ensure that any changes in the status or functions of an administrator as provided for in Sections 46-48 of this Act are notified and recorded in the manner provided for in Section 40 paragraph 2.
3. The legal effects of any changes to the status or functions of an administrator with respect to a third party in good faith are contingent upon that the measures provided for in paragraph 2 have been taken.
Charges
1. A charge of ISK 5,000 shall be paid to the State Treasury for the appointment of an administrator and any changes to his functions. A charge of the same amount shall be paid if an administrator is released from his duties at the request of his client.
2. Any charges as provided for in paragraph 1 shall be paid by the administrator's client.
Guardians
Section 51
Guardians for Minors
1. The parents of a child not possessing legal competence by reason of minor age, or any persons taking their place, shall be in charge of the child's personal affairs. This responsibility is referred to as custody, and shall be governed by the provisions of the Children's Act and the Act on Protection of Children and Adolescent Persons.
2. The parents of a child having its custody, or any other persons to whom its custody has been committed in accordance with the provisions of the Children's Act, shall manage its financial affairs.
3. Two persons managing a child's financial affairs shall exercise this function jointly. One manager may grant the other powers to exercise the management alone. Such powers may be granted for a certain period or for a certain purpose. Such powers can be revoked at any time.
4. If the financial mangers of a child are two in number, either of them may however, with full validity with respect to any third person, receive any valuables which he or she may lawfully receive, provided the other financial manager has not notified the third person that this is not allowed. If one financial manager of a child is temporarily prevented from exercising the management, any necessary decisions concerning such management taken by the other financial manager shall be fully valid. Any dispute between a child's financial managers concerning the management may be referred to the supervisor of guardians.
5. The supervisor of guardians shall appoint a financial manager for a person not possessing financial competence by reason of minor age, if a financial manager as provided for in paragraph 2 is not available or requests a release from his or her duties on grounds which the supervisor of guardians accepts as valid, or if a child's financial affairs are not regarded as adequately secure in the hands of that manager.
6. If necessary, the supervisor of guardians may appoint a particular financial manager for a person not possessing financial competence by reason of minor age, in the purpose of carrying out a particular errand on that person's behalf. This shall generally be done if the permanent financial manager possesses interests of his own in the context of that errand.
7. The supervisor of guardians shall afford any child who has attained the age of twelve years an opportunity to express its views before a financial manager as referred to in paragraph 5 or 6 is appointed, provided this is not regarded as detrimental for the child's interests or irrelevant for the conclusion of the matter in question. Any younger child may also be afforded an opportunity to express its views if the child is deemed of adequate age and maturity.
8. If a parent has decided to entrust financial management for its child to a particular person after the parent's death, that person shall be appointed a financial manager for the child, provided the child's interests do not recommend a different arrangement or a different arrangement is not provided for by law.
Guardians of Persons Deprived of Legal Competence, etc.
1. In the case of a person deprived of personal competence, financial competence, or both, by judicial decision, the power to manage that person's affairs shall revert to the supervisor of guardians in the district of his or her legal domicile. If the person in question resides permanently in another district, the power to manage his or her affairs shall however revert to the supervisor of guardians in that district. If neither the person's legal domicile nor his or her permanent place of stay is known, the power to manage his or her affairs shall revert to the supervisor of guardians in Reykjavík.
2. The supervisor of guardians shall appoint a guardian for a person deprived of legal competence as soon as possible after having received a confirmed transcript of the decision of deprivation.
3. Subject to any other provisions of this Act, the provisions on guardians shall also apply to guardians of persons subject to limited deprivation of legal competence under Section 5.
Appointment of Guardians for Specific Purposes
If necessary, a particular guardian may be appointed for a person deprived of legal competence, in the purpose of carrying out a specific errand. This shall generally be done if the permanent guardian possesses interests of his own in the context of that errand.
Qualifications of Guardians
1. Appointed guardians shall be in possession of full legal competence, financially solvent, reliable and prudent, and otherwise well suited for the task.
2. No person can be appointed guardian without that person's own approval.
Procedure
1. The supervisor of guardians shall afford a person deprived of legal competence an opportunity to request the appointment of a specific guardian, provided this is not obviously irrelevant.
2. If a person deprived of legal competence requests the appointment of a particular person as guardian, that person shall be so appointed provided this is not in conflict with the interests of the deprived person.
3. If a person deprived of legal competence is married, his or her spouse shall be afforded an opportunity to make observations concerning the selection of a guardian. This shall also apply to cohabiting partners.
Appointment of Guardians
1. A decision to appoint a guardian shall be made in writing, stating the following:
a. The name, National Registry number and legal domicile of the person not possessing legal competence, and his or her place of stay, if other than the legal domicile.
b. The name, National Registry number and legal domicile of the appointed guardian.
c. Where and when the person in question was deprived of legal competence, personal or financial, and whether the deprivation of legal competence was temporary. If so, the time of its cancellation shall be stated. In case of deprivation of financial competence that relates to particular property only, that property shall be stated exactly.
d. The remuneration of the guardian, and the manner of its payment.
2. Having taken the decision referred to in paragraph 1, the supervisor of guardians shall issue a letter of appointment to the guardian, stating the points mentioned in subparagraphs a, b and c of paragraph 1.
3. The appointment of a guardian shall not be limited in time, unless deprivation of legal competence has been so limited.
Notification of the Appointment of a Guardian, and Registration of Guardians
1. The Supervisor of Guardians shall immediately send a letter of appointment to a guardian immediately by registered mail or in some other equally secure manner. Likewise, he shall also send a confirmed copy of the appointment letter to the guardian's client and to the Ministry of Justice.
2. The Ministry of Justice shall maintain a registry of appointed guardians.
The Powers of a Guardian
1. The guardian of a person deprived of personal competence shall have the power to take any necessary decisions concerning the personal affairs of the person so deprived, which that person is unable to take on his or her own. Any lawful decision of the guardian shall be binding upon that person as if he or she had taken it in possession of full personal competence.
2. Notwithstanding the provisions of paragraph 1 the guardian of a person deprived of personal competence can not decide to commit that person to an institution against his or her will, except if a physician deems that the life or health of the deprived person is in danger. In such a case the guardian may decide to commit the person deprived of personal competence to an institution operated in accordance with the Health Services Act or the Act on the Affairs of the Disabled. The guardian shall notify the supervisor of guardians of any such decision. The transfer of a person to an institution in accordance with this paragraph and his or her status there shall be governed by the provisions of Section 19 paragraph 4, and Sections 25, 26, 27 and 28, as applicable.
3. Subject to any other provisions of law, the guardian of a person not possessing financial competence shall be in charge of that person's financial affairs. If a person has been deprived of financial competence in relation to particular property, the guardian shall only be in charge of that property. Any lawful disposition by the guardian shall be binding upon the person deprived of financial competence as if he or she had made it in possession of full financial competence.
The Right of a Person Deprived of Personal Legal Competence to Refer a Decision of Commitment to an Institution to the Courts
1. Any person deprived of personal legal competence who has been committed to an institution as decided by his or her guardian, cf. Section 58 paragraph 2, can refer the decision of the commitment to the courts.
2. The judge shall summon the guardian to appear in court, notify the guardian of the request, and afford the guardian an opportunity to present his or her views thereon.
3. Court procedure in cases of requests received in accordance with paragraph 1 shall in any other respects be governed by the provisions of Section 31, as applicable.
The Duties of Guardians
1. Except for matters of minor nature, a guardian shall consult the person not possessing legal competence on any affairs in the charge of the guardian.
2. A guardian shall conduct any affairs of the person not possessing legal competence in the manner most suitable for that person's benefit at any particular time.
3. A guardian has the duty of acting in accordance with any instructions given by the supervisor of guardians or the Ministry of Justice.
4. The Minister of Justice is empowered to issue rules in further detail on the functions and duties of guardians, and on the supervision to be exercised by the supervisor of guardians.
Compensation Liability of Guardians
1. A guardian shall compensate a person not possessing legal competence for any damage the guardian may cause that person by intent or negligence in the exercise of his functions.
Remuneration and Outlays of an Appointed Guardian
1. An appointed guardian shall at any time be entitled to refund of any necessary outlays made on account of his functions. The supervisor of guardians may decide that a guardian shall receive reasonable remuneration for his work. Such outlays and remuneration shall generally be paid from the property of the person not possessing legal competence. The supervisor of guardians may however decide that such expenses shall be paid by the State Treasury if the person in question is of low means, or if this is recommended by any other special considerations.
2. The Minister of Justice shall issue rules in further detail on remuneration to guardians.
Reports by Guardians
1. Each guardian of a person not possessing legal competence by reason of minor age shall, prior to the 1st day of March each year, provide a report to the supervisor of guardians, on a form supplied by the supervisor of guardians, on any decisions of significance that may have been taken in the previous year concerning that person's financial affairs, if his or her property equals or exceeds ISK 500,000 in value. If a financial manager has been appointed for a person not possessing financial competence by reason of minor age, the duty to provide reports shall however be governed by the provisions of paragraph 3.
2. The guardian of a person deprived of financial competence shall immediately following his appointment compile a report on that person's assets and liabilities and send it to the supervisor of guardians. This shall however not apply if a person has only been deprived of legal competence in relation to particular property.
3. Each guardian of a person deprived of financial competence shall, prior to the 1st day of March each year, provide a report to the supervisor of guardians, on a form supplied by the supervisor of guardians, on any decisions of significance that may have been taken in the previous year concerning that person's financial affairs and property management.
4. If a person not possessing financial competence acquires valuables by way of donation, as a lottery prize or otherwise, equalling or exceeding ISK 500,000 in value, the guardian shall immediately notify this to the supervisor of guardians. This shall however not apply if a person has only been deprived of legal competence in relation to particular property.
5. If the management exercised by a guardian is of extensive scope, or if recommended by specific reasons, the supervisor of guardians may order a guardian to have the management audited by a certified public auditor. The supervisor of guardians may in special cases decide that the State Treasury shall pay the cost of such audit.
6. A guardian shall at any time on demand explain the reasons for any decisions taken in the course of financial management to the supervisor of guardians.
7. When released from his duties, an appointed guardian shall provide a report to the supervisor of guardians, on a form supplied by the supervisor of guardians, on the financial and property management exercised on behalf his client.
8. The Minister of Justice is empowered to issue rules in further detail on reports to be made in accordance with this Section.
Release of an Appointed Guardian
1. The supervisor of guardians shall release an appointed guardian from his duties if the guardian so requests. The guardian shall however generally continue in his function until a new guardian has been appointed.
2. The supervisor of guardians shall release an appointed guardian from his duties on his own accord if the guardian has neglected his duties or acted in violation of his duties, or if the guardian does no longer fulfil the general requirements set by law for guardianship.
3. The appointment of a guardian shall fall out of effect upon the death of the client.
Notification of the Release of a Guardian from his Duties, and Registration
Section 57 shall apply to the release of a guardian from his duties and to registration of his release.
Management of the Assets of Persons Not Possessing Financial Competence
Section 66
Sphere of Application
Subject to the other provisions of this act, the provisions of this Chapter shall apply to management of the assets of persons not possessing financial competence by reason of minor age, as well as to management of assets on behalf of persons deprived of financial competence.
Safekeeping and Management of the Assets of Persons Not Possessing Financial Competence
1. The assets of a person not possessing financial competence shall be well safeguarded and managed so as to provide returns in the most feasible manner available at any particular time.
2. The assets of a person not possessing financial competence shall, if they exceed ISK 500,000 in value, be kept and managed following consultation between the supervisor of guardians and the guardian.
3. A guardian shall keep the funds and negotiable instruments of a person not possessing financial competence separated from his own assets at all times.
4. The supervisor of guardians can, if necessary in his opinion, take into his own possession any assets in the ownership of a person not possessing financial competence. A guardian does not have the authority to make dispositions concerning any assets taken into the possession of the supervisor of guardians.
5. Approval by the supervisor of guardians is necessary for payment from the assets of a person not possessing financial competence of expenses for maintenance, education, or any other purpose. In cases of deprivation of financial competence relating to particular property, this shall however only apply to the assets to which the deprivation relates.
6. The Minister of Justice is empowered to issue rules in further detail concerning the keeping and management of assets belonging to persons not possessing financial competence.
Income and Dividends from Property, etc.
1. A guardian shall ensure that any income and dividends of from property in the ownership of a person not possessing legal competence are used for the benefit of its owner.
2. A guardian can, if he deems this needed and in conformity with the interests of the person not possessing financial competence, deliver his client a suitable amount of money for personal use from the client's income or dividends. A guardian may likewise, if approved by the supervisor of guardians as provided for in Section 67 paragraph 5, deliver his client funds from the client's principal for personal use, if the client's income does not suffice.
Purchase and Sale of Property, etc.
1. Approval of the supervisor of guardian is necessary in order to make a person not possessing financial competence bound by an agreement for purchase or sale of real property, an aircraft, a ship or a vehicle subject to registration, or a client's business enterprise. This shall also apply if a person not possessing financial competence is delivered such property without valuable consideration. Property as referred to in this paragraph shall not be alienated unless this is obviously of benefit to the person not possessing financial competence.
2. Approval of the supervisor of guardians is necessary for a valid agreement on lease of real property in the ownership of a person not possessing financial competence for a period exceeding three years, except if right of termination is provided for on a suitable notice.
3. Approval of the supervisor of guardians is furthermore necessary for any dispositions of significant or extraordinary nature, with regard to the means of a person not possessing financial competence, concerning the management of his or her assets, such as purchase or sale of moveable property of high value or engagement of a managing director for the business enterprise of a person not possessing financial competence.
4. The Minister of Justice is empowered to issue rules in further detail on the form and content of requests made by guardians for approval by the supervisor of guardians in accordance with this Section, and on the information to be supplied with such requests.
Pledges, Mortgages, and Encumbrances
1. Approval by the supervisor of guardians is necessary for making real property, aircraft, ships or vehicles for which registration is required, or business enterprises owned by persons not possessing financial competence, subject to any pledge, mortgage, lien or other encumbrance. The same shall apply to the granting of any such rights relating to negotiable instruments, bank deposits or chattels, if of comparatively high value. The supervisor of guardians shall only grant his approval if the measure is of benefit to the person not possessing financial competence.
2. The supervisor of guardians can only approve the measures referred to in paragraph 1 in order to provide security for the liabilities of the person not possessing financial competence. In special cases the supervisor of guardians can however approve measures to provide security for the guardian's liabilities.
3. The Minister of Justice is empowered to issue rules in further detail on the form and content of requests made by guardians for approval by the supervisor of guardians as provided for in this Section, and on the information to be submitted with such requests.
Guaranties for the Benefit of a Third Party
1. A person not possessing financial competence can not be bound by guaranty or suretyship for the benefit of any third party.
2. The supervisor of guardians may however grant exceptions from the provision of paragraph 1 in special cases, with a view to the interests of the person not possessing legal competence.
Credits
1. The approval of the supervisor of guardians is necessary for extending on credit any funds owned by a person not possessing financial competence. Such credits can only be extended against secure real property mortgage. The amount of the credit may not exceed two thirds of the real property assessment value of the property in question. The supervisor of guardians shall only grant his approval if the measure is of benefit to the person not possessing financial competence.
2. Mortgage instruments issued on account of loans extended by persons not possessing financial competence shall contain a provision to the effect that the entire loan shall become due and payable in case of default of payment of interest or any instalment, and that in such an event, forced sale may take place of the mortgaged property without prior judgment, settlement in court or enforcement proceedings.
3. If a person has been deprived of financial competence with respect to particular property, the provisions of this Section shall only apply to that property.
Reports to the Supervisor of Guardians
1. Any person making a payment in money to the guardian of a person not possessing financial competence shall, if that person is the owner thereof and if the amount in question equals or exceeds ISK 500,000, notify this to the supervisor of guardians.
2. Notification as provided for in paragraph 1 shall be addressed to the supervisor of guardians in the district of the owner's legal domicile.
Legal Dispositions of Persons Not Possessing Legal Competence
Section 74
Sphere of Application
Subject to the other provisions of this Act, the provisions of this Chapter shall apply in cases of persons not possessing legal competence by reason of minor age, as well as in cases of persons deprived of legal competence. If a person has been deprived of legal competence with respect to particular property, the provisions of this Chapter shall only apply in relation to that property.
Right of Legal Disposition of Persons Not Possessing Legal Competence
1. Subject to other provisions of law, a person not possessing financial competence shall not be competent to make dispositions concerning his or her property.
2. A person not possessing financial competence shall be competent to make dispositions concerning already acquired earnings. A person deprived of financial competence shall however only be competent to make dispositions concerning earnings acquired after the decision of deprivation of financial competence was rendered.
3. Subject to any conditions set by a donor and any specific provisions of law, a person not possessing financial competence shall be competent to make dispositions concerning donations, including donations given in contemplation of death. A person deprived of financial competence is however only competent to make dispositions concerning donations received after the decision of deprivation of financial competence was rendered.
4. A person not possessing financial competence shall in the same way be competent to make dispositions concerning funds the guardian may have delivered him or her for personal use.
5. In case of comparatively large amounts of earnings or donations, or if the person not possessing legal competence treats the funds carelessly, the supervisor of guardians may, without regard to any conditions set by a donor, as applicable, take the funds into his possession in part or in whole, or authorise the guardian to do so, and the person not possessing financial competence does not have any right of disposition over those funds while this measure remains in effect.
6. The right of disposition of a person not possessing financial competence over earnings and donations shall also apply to any dividends from such valuables, and to any valuables that may be substituted for them.
7. The provisions of this Section do not permit a person not possessing financial competence to undertake any liabilities or to pledge or mortgage any property to which they apply.
Legal Dispositions of Persons Not Possessing Legal Competence
1. Unauthorised legal dispositions of a person not possessing legal competence shall not be binding upon that person.
2. Legal dispositions made by a person deprived of financial competence, without this having been limited to particular property, shall not be binding upon that person if they are made in conflict with the deprivation after the decision of deprivation has been published in the Government Gazette. If measures as provided for in Section 14 paragraph 4 are taken before the decision of deprivation is published, the legal effects of the deprivation shall, with regard to the property referred to there, be determined by reference to the point in time when those measures are taken.
3. The legal effects of a deprivation of financial competence relating to particular property only shall, with respect to any third parties in good faith, be contingent upon the measures provided for in Section 14 paragraph 4 having been taken.
Rescission of Agreements Concluded by Persons Not Possessing Legal Competence
1. If a person not possessing legal competence has concluded an agreement without having the authority to do so, the other party shall be entitled to rescind the agreement, provided the agreement has not been confirmed by the guardian or performed in a binding manner on behalf of the person not possessing legal competence.
2. A person knowingly concluding an agreement with a person not possessing legal competence without reasonably believing that the guardian's approval has been granted can not rescind their agreement before the period for obtaining the guardian's approval has passed, if such a period has been agreed on, or when a suitable period for this purpose has passed. This shall also apply if the approval of the supervisor of guardians is needed.
3. A person having concluded an employment agreement with a person not possessing legal competence can, in a situation such as referred to at the beginning of paragraph 2, not rescind their agreement while the person not possessing legal competence performs the agreement.
4. Rescission shall be notified to both the person not possessing legal competence, and to the guardian.
Settlement Following Invalidation of Agreements due to Lack of Legal Competence, etc.
1. In cases of invalidation of agreements due to lack of legal competence, each party shall return any valuables received. If chattels can not be returned, each party shall pay the value thereof as follows:
a. The person negotiating with the person not possessing legal competence shall pay the full value of the chattels in question. Compensation for a chattel to be returned under the terms of their agreement shall however not be made to the extent its degeneration or destruction is due to characteristics in existence at the time of its delivery. If a person has received chattels or valuables from a person not possessing legal competence by way of donation or for safekeeping, compensation may be reduced as deemed reasonable.
b. The person not possessing legal competence shall make payment to the extent the valuables in question have been of use to that person.
2. If the person not possessing legal competence has acted fraudulently or otherwise dishonestly in concluding the agreement or delivering any valuables as agreed, or has negligently or intentionally caused the loss of a chattel which was to be returned under the terms of the agreement or as a result of its rescission, compensation shall be made to the other party. The courts may however reduce the amount of the compensation with a suitable regard to the degree of fault evinced, the amount of the loss sustained, the means of the person not possessing legal competence, and other circumstances.
3. If it is established in a criminal case that a person not possessing legal competence has acted criminally in connection with the conclusion of an agreement or in carrying out its terms, that person shall make compensation in accordance with the generally applicable rules.
Enforcement of Debts by Forced Sale of Property to which Deprivation of Financial Competence According to Section 5 Paragraph 2 Relates
1. If a person deprived of financial competence with regard to certain property in accordance with Section 5 paragraph 2 of this Act undertakes financial liabilities or guaranties for the benefit of a third party after measures have been taken as provided for in Section 14 paragraph 4, enforcement can not be sought by forced sale of the property to which the deprivation relates.
Supervision of Guardians
Section 80
Supervisors of Guardians
Magistrates shall be supervisors of guardians, each within the area of his office.
The Roles of Supervisors of Guardians
1. Supervisors of guardians shall appoint guardians and administrators.
2. Supervisors of guardians shall exercise control over the functions of appointed guardians and administrators as provided for in this Act. They shall also exercise control over financial management by the guardians of persons not possessing financial competence by reason of minor age.
3. Supervisors of guardians shall also exercise any other functions committed to them by this Act and any other acts of law.
Records to be kept by Supervisors of Guardians
1. Supervisors of guardians shall keep books recording their decisions taken in accordance with this Act.
2. The Minister of Justice is empowered to issue rules in further detail on the keeping of record books by supervisors of guardians.
Appeal
Any administrative decisions taken by supervisors of guardians may be appealed against to the Minister of Justice within 30 days from its notification.
Miscellaneous Provisions
Section 84
Price Adjustments
Amounts referred to in Section 50 paragraph 1, Section 63 paragraphs 1 and 4, Section 67 paragraph 2, and Section 73 paragraph 1 are basic amounts and can be adjusted in proportion to the Consumer Price Index, for the first time 1 January 1999. The Minister of Justice shall announce any such adjustments by an advertisement in the Government Gazette.
Entry into Force
This Act shall enter into force 1 January 1998.
Repealed Acts of Law
On the entry into force of this Act, the Act on Legal Competence, No. 68/1984, shall be repealed.
Conflict of Laws
1. A request for involuntary commitment, deprivation of legal competence or cancellation of deprivation of legal competence submitted during the period of effect of Act No. 68/1984 shall, if not resolved at the time this Act enters into force, be resolved in accordance with the provisions of Act No. 68/1984, if the party having made the request does not request a resolution in accordance with the provisions of this Act.
2. The duties of guardians appointed in accordance with the provisions of Act No. 68/1984 or older Acts shall be as provided for in this Act.
Persons who have acquired personal legal competence in accordance with the provisions of Act No. 68/1984 at the time this Act enters into force shall retain their personal legal competence. Persons not possessing personal legal competence by reason of minor age at the time this Act enters into force shall acquire personal legal competence as provided for in Section 1.
Source: Ministry of Justice and Ecclesiastical Affairs, http://eng.domsmalaraduneyti.is/laws-and-regulations/nr/98.