The Ministry of Economy (ME) states that the new regulation will better protect the legal interests of apartment owners’ associations, residential house managers and utility service providers against the actions of apartment owners by not paying for the services received and not fulfilling the duty of loyalty to the apartment owners’ association regarding the creation of savings for a residential house .
Also, the scope of rights and obligations will be expanded for those persons who are considered as potential owners of apartment property and on whom the burden of real estate lies as a result of the purchase of apartment property.
Normative acts determine the obligation of apartment owners to make payments, including for the services necessary for the maintenance of the residential house, management expenses, as well as the payments determined by the community of apartment owners in the savings fund.
EM emphasizes that in practice situations arise in which the debt for the service provided to the individual apartment property can negatively affect the service receipt for all apartment owners or the entire apartment building.
Similarly, apartments with debt are often sold and debt recovery becomes even more difficult, because when the property of this apartment is expropriated, the accumulated debts of the previous owner of the apartment are not transferred to the new owner of the apartment.
The prepared amendments to the Apartment Property Law provide that the new owner of the apartment property is responsible for real estate debts that arose no earlier than one year before the apartment property was acquired. This will protect the communities of apartment owners, as well as the legal interests of residential house managers and utility service providers in relation to apartment owners who do not pay for the services they receive.
In order to implement the real burden institute or the principle “debt follows the apartment”, amendments were additionally prepared to the Law on the Management of Residential Buildings, expanding the range of persons who are entitled to request information about the amount of debt that lies on the specific apartment property, providing such rights to the potential apartment buyer.
At the same time, legal norms have been added, which determine which payments a person is entitled to request a statement about, including the payments of apartment owners to the savings fund, as well as clearly defined management expenses to which the real burden applies.
It is predicted that the amendments to both laws will ensure continuous operation and quality preservation of residential houses, as well as the continuity of the provided services, while increasing the possibility of recovering financial funds for the provided services or unpaid contributions to the common savings fund of apartment owners.
Amendments to both laws still need to be approved by the Saeima.