COBALT Latvian Real Estate and Project Development News
State Land Service has opened its data
As of 2022, the State Land Service has openly published large volumes of data held by the Service, providing more opportunities for free access to certain data.
Open data are available free of charge to everyone on the Latvian Open Data Portal and the National Geospatial Information Portal. With the opening of the data, more data of the National Real Estate Cadastre are also publicly available on the portal www.kadastrs.lv. For example, by logging into www.kadastrs.lv via internet bank anyone can now access data of cadastral objects (e.g., to find out object areas, types and purposes of use, land unit encumbrances, etc.) and view highly detailed topographic information under “Maps” -> “Map Browser”.
New Riga Spatial Plan
On 15 December 2021 Riga City Council approved one of the most important spatial development planning documents of the capital, Riga Spatial Plan until year 2030. An unpleasant surprise for a wider public was a decision of the Ministry of Environmental Protection and Regional Development as of 23 March 2022 to suspended the Plan. As the main reasons for suspension were cited the Plan’s significant shortcomings: non-compliance with the law and the lack of proportionality between the interests of the involved parties. Riga City Council decided to challenge the Ministry’s decision and the Constitutional Court has initiated the respective case on 29 June 2022.
The length of review is difficult to predict at the current stage. Until the new Riga Spatial Plan is adopted, the existing Spatial Plan will continue to apply.
Maximum amount of the stamp duty in case of alienation of real property
As of 1 January 2022, a maximum amount of EUR 50,000 is set for the state duty for registration of title in the Land Register.
News on apartment properties
Rights and obligations of the apartment owners’ association
The amendments to the Law on Apartment Property, which entered into force on 13 April 2022, broaden the definition of an apartment owners’ association, define who are the representatives of an apartment owners’ association and what shall form a property of an apartment owners’ association. Further, they establish certain rights and obligations of an apartment owners’ association for carrying out an economic activity or employing a natural person.
Electronic conduct of a general meeting of apartment owners and digitisation of a house file
The amendments to the Law on Apartment Property, which entered into force on 3 May 2022, govern the process of adoption of decisions of apartment owners through the Building Information System, as well as introduce a possibility of holding a general meeting or survey in the electronic environment provided by the functionality of the above system.
Amendments to the Law on Management of Apartment Buildings provide that no later than from 28 February 2023 house files in all apartment buildings shall be maintained in the Building Information System.
Public construction contracts
The Cabinet of Ministers and the Ministry of Economics recently have adopted two significant documents with an aim to govern certain aspects of public construction contracts. In view of the share of the public construction contracts in the overall Latvian construction market, provisions of the newly adopted documents have a potential to impact usages on the private market also.
Regulations on the Mandatory Provisions and Content of Public Construction Contracts
In July 2022 the Cabinet of Ministers adopted Regulations (Public Contracts Regulations) on the mandatory provisions and content of public construction contracts, introducing uniform transfer-acceptance procedures, payment terms and requirements for securities. The rules shall apply to public procurements of construction works that will be announced after 1 January 2023.
Amongst other, regulations provide for:
- obligation of contractor to perform payments to sub-contractors no later than within 60 days after acceptance of the subcontractors’ works;
- obligation of the employer to procure expert opinion in case if the contractor has filed objections in respect of refusal by the employer to accept any interim works;
- mandatory indexation in contracts with duration in excess of 12 months;
- maximum limit of 5% of the contract price for retention money and warranty period guarantees and 10% of the contract price for the performance guarantees;
- an option for the contractor to choose between bank guarantee, insurance or retention as a security;
- maximum penalties up to 10% of the contract price (excluding delay penalties).
Guidelines for price indexation of construction contracts
The Ministry of Economics has developed Guidelines for Price Indexation of Construction Contracts in reaction to the requirement under the Public Contracts Regulations to include indexation in all contracts with duration in excess of 12 months
The guidelines contain recommendations for indexation models and reference factors to be taken into account when choosing a particular model. The choice of a model is left with the employer. The employer shall take into account the characteristics of the specific project, risks related to its implementation, as well as the customer’s preferred model for managing the risk of price increases.