Document Verification of the Owner

Our clients often ask - how does KOM-INVEST verify real estate properties? Do we rely on the information and documents provided by the seller? Do we request information from archives or the state land register?

In fact, everything happens much more simply and effectively. In this article, we will walk you through the property verification process step by step.

Verification #1. Land Register

https://www.zemesgramata.lv/

What is the land register?

It is a state registry that contains data on all Latvian real estate properties. The land register shows the complete history of a property and its owners.

That is, in the land register you can find information about the composition of the property (apartment, private house, commercial space, land plot); about the area of the property; about all current and former owners of the property; about the basis for acquiring property rights (purchase agreement, or donation agreement, or division of marital property); about registered encumbrances (bank mortgages, arrests, litigation).

Land register records are available in paper format and electronic format.

For example, the original property ownership certificate (in paper form) can be requested at the Land Register office where the property is located. Or, you can visit the land register website, pay approximately 6 euros, and receive an online version of the mentioned certificate.

We always analyze the online property ownership certificate, as the electronic version contains the most current information and all changes that occur with the property are entered into it.

If we do not identify significant issues related to property rights or encumbrances, we continue the verification.

Verification #2. Business Register

If the property owner is a legal entity, it is necessary to understand what confirmations are required to sign a purchase agreement.

If the company has multiple founders, it is recommended to obtain the original minutes of the founders' meeting where the decision to sell the property to a specific buyer on specific terms was made.

If the company has multiple directors, it should be checked how they are authorized to sign the purchase agreement. For example, only both together. Or each separately.

Information about the composition of founders and management of the company is available in the electronic database of the business register. Access to this database can be obtained on the unified website of electronic services: www.lursoft.lv (cost approximately up to 7 euros).

If we do not identify significant issues related to corporate matters, we continue the verification.

Verification #3. Land Service

The land register allows for legal (juridical) verification of the property.

However, technical verification is equally important. For example, in what year the building housing the apartment was constructed. What is the degree of wear on this building. What is the registered functional designation of the apartment ("apartment" may have the status of office or hotel room). Does the actual layout of the apartment correspond to the plans and drawings registered in the corresponding state registers. Are there no registered entries about illegal construction or illegal renovation of the apartment.

All the mentioned information can be obtained on the website of the state Land Service: www.kadastrs.lv (cost approximately up to 3 euros).

If at this stage we also do not identify significant issues, the verification continues.

Verification #4. Building Register

In the event that an apartment is located in a newly constructed building, it should be verified whether the building has been put into operation.

For example, the Riga Construction Administration has a database where you can find out by property address the date the building permit was issued, view a list of permitted construction works (facade repair, house reconstruction, new construction), and learn the date of handover into operation.

The link to this database is - https://atdep.rcc.lv/exp/buve/atlaujas.aspx

If at this stage we also do not identify significant issues, the verification continues.

Verification #5. Utility Payment

For an apartment buyer, it is very important that there are no debts for utilities (maintenance, heating, garbage collection, hot and cold water consumption, electricity, gas, etc.).

Typically we request from the seller the latest utility payment receipt, as well as the electricity and gas connection contracts.

In the latest receipt, you can see the payment balance. If there is a debt, the exact amount of the debt will be indicated (for example, the debt is 100 euros). If there is no debt, the "debt" section will show zero. The receipt will also indicate the number of the management company. By calling this number and naming the apartment address, you can verify payment discipline (how regularly utility bills are paid), you can learn about problems in the building, about residents' cooperation in solving common problems.

Similarly, you can find out about electricity and gas bill payments. For electricity, you usually need to contact "Latvenergo" (www.latvenergo.lv), for gas - "Latvijas Gaze" (www.lg.lv). By providing the apartment address and account number, you can find out about the presence or absence of debts.

In the event that the owner of the apartment being sold has outstanding debts, it should be clarified (with the management company, electricity company, or gas company) whether collection proceedings have been initiated against the apartment being sold. If collection proceedings have already begun, this may complicate the sale process.

If collection proceedings have not begun, we recommend concluding a three-party agreement between the seller, buyer, and utility provider, which outlines the process for repaying the debt. For example, part of the purchase price may be directed towards paying off the utility debt.

Verification #6. Information about Persons Registered at the Apartment

It is also an important circumstance whether there are registered persons. What negative consequences can be associated with the fact that unfamiliar persons are registered at the apartment?

First, correspondence addressed to them may arrive.

Second, some utility service items are calculated based on the number of people registered in the apartment. If several people are registered in the apartment, this may increase the utility costs.

Third, in our practice there have been cases where police and customs representatives came to the apartment to find people who were registered at the address. Naturally, this creates inconvenience for the new apartment owner.

To avoid these inconveniences, before the transaction is completed and before the apartment is transferred, the previous owner must provide a printout from the government services website (www.latvija.lv), or provide a certificate issued by the Department of Citizenship and Migration confirming that no one is registered at the apartment.

Conclusion