Latest developments in resolving disputes between co-owners of real estate

14.06.2022 Dmitrijs Sustovs, head of the Litigation department of the Law

On May 1, 2022, amendments to the Latvian Civil Law came into force, providing for new legal mechanisms for resolving disputes between joint owners, including disputes on the termination of joint ownership.

The first novelty provides for a restriction on the requirement for the division of joint property.

Thus, if a co-owner, on the basis of a transaction or at an auction, has acquired a share of immovable property, which includes a building with residential premises, the law prohibits him/her from demanding the division of joint property earlier than five years from the date of registration of the right of ownership in the Land Register, if there is no important reason for that. The presence of an important reason is established by the court.

The second novelty concerns the protection of the interests of the majority of co-owners.

If one of the co-owners causes harm to other co-owners, maliciously using his rights or not fulfilling his duties as a good and caring owner, the majority of the co-owners may demand the alienation of the share of such a co-owner.

The share of a co-owner is subject to alienation to other co-owners, transferring it to one or several co-owners with the obligation to reimburse the cost of the share in money, or the share is alienated by selling at a closed auction among the other co-owners. If none of the co-owners is willing to acquire the alienated share or the court has reasonable doubts about the expediency of such a method of alienation, the court decides to sell this share at public auction.

The third novelty makes it possible to terminate joint ownership by dividing a building with residential premises into apartment properties. So far, this possibility has not been provided for by the Latvian Civil Law. Now, if a dispute arises between the co-owners of a residential building regarding the division of joint property, the division of joint ownership of apartment properties is determined by law as the primary form of division of joint property.

After the amendments to the Civil Law of Latvia come into force, in cases on the termination of joint ownership, which includes a residential building, the parties will be able to apply for the division of the house into apartment properties, and the court is obliged to evaluate this option of termination of joint ownership as a priority along with others.

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