At a Cabinet meeting on October 29 this year, the amendments prepared by the Ministry of Economics (ME) to the Apartment Property Law and the Residential House Management Law were approved, introducing a statutory "real burden" principle, meaning "debt follows the apartment."

The new regulation will better protect the legal interests of apartment owners’ associations, residential house managers, and utility service providers against apartment owners who fail to pay for services received or who do not fulfill their duty of loyalty toward the apartment owners’ association, especially regarding the creation of savings for the residential building. Additionally, the rights and obligations of potential apartment property acquirers, upon whom the real burden falls as a result of acquiring the apartment, will be expanded.

Legislation mandates that apartment owners are responsible for payments, including services necessary for maintaining the residential building, management expenses, and contributions to the savings fund established by the apartment owners’ association. In practice, situations arise where debt related to a specific apartment can negatively impact the receipt of services for all apartment owners or the entire building. It is also common for apartments with debt to be sold, making debt recovery more difficult, as the accumulated debts of the previous apartment owner do not transfer to the new owner.

The prepared amendments to the Apartment Property Law stipulate that the new apartment owner will be liable for debts arising from real burdens incurred no earlier than one year before acquiring the apartment. This will protect apartment owners' associations and the legal interests of residential building managers and utility service providers concerning apartment owners who fail to settle payments for services received.

To implement the real burden principle or the "debt follows the apartment" rule, additional amendments have been made to the Residential House Management Law. These amendments expand the range of persons entitled to request information about the debt amount on a specific apartment property, granting these rights to potential apartment buyers. Additionally, legal norms have been supplemented to clarify the payments for which a person is entitled to request information, including contributions to the apartment owners' savings fund. Management expenses subject to real burden have also been clearly defined.

The amendments to both laws are expected to ensure the continuous operation and quality maintenance of residential buildings, as well as the uninterrupted provision of services, while increasing the likelihood of recovering financial resources for provided services or unpaid contributions to the apartment owners’ association savings fund. The amendments to both laws still need to be approved by the Saeima.

Ministry of Economics

Public Relations Department

prese@em.gov.lv