Fyrirvara

Fyrirvara is an Icelandic legal and financial term that refers to a guarantee, security, or collateral pledged to secure the performance of an obligation or the repayment of a debt. In practice, it denotes an interest or claim held by a creditor over the debtor’s property or assets, which can be realized if the borrower defaults.

The concept covers a range of arrangements. Common forms include real estate mortgages (veð) and pledges of movable property, as well as other forms of security interests and guarantees, such as personal guarantees or bank guarantees. A fyrirvara gives the creditor a priority claim and a practical means to satisfy the debt if obligations are not fulfilled. The exact form and enforceability depend on the governing agreement and applicable Icelandic law.

Enforcement and administration: For a fyrirvara to be effective, it must be properly documented and, where required, registered or noted in the appropriate registries. The release of a fyrirvara typically occurs when the underlying obligation is fulfilled or the collateral is released by agreement. In lending and secured transactions, the terms governing the rights, responsibilities, and procedures for enforcing the collateral are outlined in the contract and in relevant legislation.

See also: veð (mortgage), veðréttur (security interest), secured transactions, collateral, guarantees.