Amendments to the law stipulate that the landowner will not be able to impede the exercise of the building owner’s rights and will not be able to do anything that would restrict the building owner’s land use rights or otherwise harm him or her. The landowner will not be able to change anything in the legally used land against the will of the building owner, for example, to build a building on the usable land, nor will it be able to encumber the legally used land to the user’s detriment, for example by establishing an easement or renouncing an easement without the building owner’s consent.
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The legal right to use the land will expire only if the building and the land are merged into one real estate or if the building is demolished. The legislators have thought, but have not found a solution, of how the compulsory tenancy relationship could be abolished altogether.
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TM recalls that the regulation of these relations by law is necessary for the law to determine the content of these relations in shared property relations, where the land belongs to one owner and the building to another owner, where there is often disagreement and complex relations.
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TM promises that the changes will clarify and simplify the legal relations between the parties and reduce the number of disputes and litigation in the field of shared property relations. Changes to the law will still have to be considered in the Saeima.
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“In the situation of shared property, in essence, it requires a political decision as to which person involved in it will be limited to the real estate owned by him, so that the other person can fully exercise his / her property rights. Considering that the property rights of both persons are protected, to create a compensatory mechanism for the limited owner, which would be proportional to the restriction imposed on it. Only in the presence of such a proportional compensation mechanism can a balance be ensured between the protected interests of the persons involved in the shared property, “TM notes in the annotation.
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A total of 206,600 buildings are located in the shared property, located on 68,900 land units owned by other persons. Of these, 3,677 are multi-apartment residential houses with 110,970 apartments.
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The Ministry acknowledges that the issue of the amount of fair rent in shared property has been addressed for 13 years. The laws have been amended several times, and in three judgments of the Constitutional Court (ST) the legal norms regulating forced rent have been recognized as inconsistent with the Satversme.
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The Minister of Justice Jānis Bordāns (JKP) promises that the new draft law will eliminate the unclear relations between homeowners and landowners in shared ownership.
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“The number of lawsuits will be reduced and landowners will not have the opportunity to disproportionately increase rents. In fact, the government has every opportunity to go further and alleviate the situation of homeowners if it is also ready to support TM’s offer to reduce property tax on residential land from 1.5 % to 0.3%, “said Bordan.
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Currently, the draft law has been drafted on the assumption that the landowner pays the standard real estate tax (RET) rate – 1.5% of the cadastral value for the land in shared ownership. According to the changes in the REN rates, amendments to the draft law will be prepared, namely, if the government and the Saeima support the TM proposal to set the REN rate for residential land at 0.3%, the maximum compulsory rent provided for in the bill could be reduced to 2.8. %.
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The draft law envisages that it will enter into force on January 1, 2021. If the mutual legal relations between the land and building owners are already determined by an agreement or a court judgment, part of the changes will be applied to these relations as of 1 January 2022.
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