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Monday, 05 June 2017 13:11

The Construction rights

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In order to deal with the divided property from 1 January 2017, amendments to the law “On the Time of Coming into Force and Application Procedure of the Introduction, Inheritance Law, and Property Law Parts of the Renewed Civil Law of the Republic of Latvia of 1937” has come into force, that provides that further establishment of divided property will not be possible regarding apartment buildings, as well as a new concept of construction rights has been introduced. From 1 January 2017, a new framework for Property Law– the Construction rights– are adopted supplementing the Section of the Property Rights of the Civil Law with Chapter Three A "The Construction rights". The Construction rights give the right during the period of the Construction rights agreement to erect non-residential buildings or engineering structures (gas stations, hangars, etc., as well as areas with limited land expropriation: ports, special economic zones etc.) on a land plot owned by another person. It is provided that the Construction rights may be granted for remuneration or free of charge. The term of the Construction rights may not be shorter than 10 (ten) years. The Construction rights may be inherited transferred to third parties, as well as pledged. All rights of third parties established over the Construction rights shall terminate simultaneously with expiry of the term of the construction rights, for example, pledge. After expiry of the construction rights the building or engineering structure shall become an essential part of the land plot, and the land owner shall acquire the building or engineering structure without compensation, unless such compensation is provided in the Construction rights agreement. The parties may agree that the user of the construction rights is obliged to clear the land plot prior to expiry of the Construction rights. 

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