From Iceland — Icelandic Labour Union Takes On Bank Connected To Rental Company

Icelandic Labour Union Takes On Bank Connected To Rental Company

Published February 19, 2019

Andie Sophia Fontaine
Photo by
Art Bicnick

The Store and Office Workers’ Union (VR) has threatened to withdraw over 4 billion ISK in union funds from a bank set to take over a rental company that recently gave tenants just four days to respond to a rent hike in the tens of thousands of krónur. The bank in question, Kvika, denies that they have any influence or connection to the business practices of the rental company, Almenna leigu­fé­lag (AL), and this company says the short-notice rent hike was due to human error.

In an open letter to Kvika that VR published on their site, they report that many of their union members have informed the union that AL has given them little notice to respond to a rental hike in the tens of thousands of krónur. They published text from an email sent to one renter, sent out on February 1, giving the tenant until February 5 to agree to a two-year lease with a large rent increase.

In response, VR says that Kvika has four days to make AL cease an unreasonable rent increase and to ensure the tenants will not be tossed out into the street. If Kvika does not meet this demand, VR says, the union will withdraw all their funds from Kvika, which amounts to 4.2 billion ISK.

The response, from both Kvika and AL, has been swift.

Ármann Þor­valds­son, the director of Kvika, told Kjarninn that Kvika has no say over AL’s practices. This, Ármann says, is because while Kvika is set to buy Gamma, the company that owns AL, that sale has not yet been finalised, and is awaiting approval from the Icelandic Competition Authority. Further, he contends the finalisation process could take weeks or months, and once complete, Kvika will not be allowed to have any say over what Gamma does.

In response to this, Ragnar Þór Ingólfsson (seen above), the director of VR, posted on his Facebook that “if it turns out to be true that Kvika has nothing to do with decisions made by Gamma/AL, which I actually highly doubt, then the bank has the same amount of time to break the proposed purchase of a company that is solely driven by profit considerations against the general public.”

María Björk Einarsdóttir, the managing director of AL, expressed sentiments similar to Ármann with RÚV, adding that Ragnar’s words are tantamount to “a disturbing attack” against the company. She defended the rent hikes as necessary for the company to be profitable, but said that the very short notice given to tenants was due to human error. She says some of the tenants in question have been contacted and given more correct information, saying that they actually have a much longer (but undisclosed) time to decide whether or not to accept the new terms.

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