Our clients often ask - how does KOM-INVEST perform property verification? Do we rely on the information and documents provided by the seller? Do we request information from the archive or the state land registry?
In fact, everything happens much more simply and efficiently. In this article, we will explain step by step how the apartment verification process works.
Check № 1. Land Registry
What is a land registry?
It is a state register that stores data on all Latvian real estate properties. The land registry shows the complete history of the property and its owners.
That is, in the land registry you can find information about the composition of the property (apartment, private house, commercial premises, 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 gift agreement, or division of marital property); about registered encumbrances (bank mortgages, arrests, court disputes).
Land registry records are available in both paper and electronic format.
For example, the original certificate of ownership (in paper form) can be requested from the Land Registry office where the property is located. Or, you can visit the land registry website, pay approximately 6 euros, and obtain an online version of the aforementioned certificate.
We always analyze the online certificate of ownership, because it is the electronic version that contains the most up-to-date information, with all changes to the property recorded in it.
If we do not identify any significant problems related to ownership rights or encumbrances, we continue the verification.
Check № 2. Enterprise Register
If the property owner is a legal entity, you should understand what documents are necessary to sign a purchase agreement.
If the company has multiple founders, it is recommended to obtain the original minutes of the founders' meeting at which a decision was made to sell the property to a specific buyer on specific terms.
If the company has multiple directors, you should check how they are authorized to sign the purchase agreement. For example, both together only. Or, each separately.
Information about the composition of founders and the composition of the company's board is available in the electronic database of the enterprise register. Access to this database can be obtained on the unified e-services website: www.lursoft.lv (cost approximately up to 7 euros).
If we do not identify any significant problems related to corporate matters, we continue the verification.
Check № 3. Land Service
The land registry allows for legal (juridical) verification of the property.
However, technical verification is no less important. For example, in what year the house containing the apartment was built. What is the degree of wear on this building. What is the registered functional designation of the apartment (an "apartment" may have the status of an office or hotel room). Does the actual layout of the apartment correspond to the plans and drawings registered in the relevant state registers. Are there no records of illegal construction or illegal renovation of the apartment.
All the aforementioned 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 any significant problems, the verification continues.
Check № 4. Construction Register
In the case where the apartment is located in a recently built house, you should check whether the house has been put into operation.
For example, the Riga Construction Administration has a database where you can find out the date of construction permit issuance by property address, view a list of authorized construction work (facade repair, building reconstruction, new construction), and find out the date of commissioning.
Link to this database - http://atdep.rcc.lv/exp/buve/atlaujas.aspx
If at this stage we also do not identify any significant problems, the verification continues.
Check № 5. Payment of Utilities
For an apartment buyer, it is very important that there are no debts for utilities (maintenance, heating, garbage removal, hot and cold water consumption, electricity, gas, etc.).
Usually we request from the seller the latest utility payment receipt, as well as the electricity connection contract and gas connection contract.
In the latest receipt you can see the payment balance. If there is an outstanding 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. Also in the receipt will be indicated the number of the management company. By calling this number and stating the apartment address, you can check 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 payment of electricity and gas bills. For electricity, you usually need to contact the company "Latvenergo" (www.latvenergo.lv), for gas - with the company "Latvijas Gaze" (www.lg.lv). By stating the apartment address and subscriber number, you can find out whether there are debts or not.
In the event that the owner of the apartment being sold has outstanding debts, you should clarify (from the management company, or the electricity company, or the gas company) whether collection proceedings have been initiated against the apartment being sold. If the collection process has already begun, this may complicate the apartment sale process.
If the collection process has not begun, we recommend concluding a tripartite agreement between the seller, buyer and utility provider, which will specify the process of debt repayment. For example, part of the purchase amount may be directed to pay off the utilities debt.
Check № 6. Information about Persons Registered in the Apartment
An important consideration is also the absence of registered persons. What negative consequences could be associated with unknown persons being registered in the apartment?
First, correspondence addressed to them may arrive.
Second, some utility items are calculated based on the number of registered people in the apartment. If several people are registered in the apartment, this may increase the amount of utilities.
Third, in our practice there have been cases where police and customs representatives came to the apartment to find people who were registered there. Naturally, this creates inconvenience for the new apartment owner.
To avoid these inconveniences, before completing the transaction and before transferring the apartment, the previous owner must provide a printout from the state services website (www.latvija.lv), or provide a certificate issued by the Department of Citizenship and Migration Affairs confirming that no one is registered in the apartment.
Conclusion
Of course, this is not all the aspects we verify. We also inquire about property tax payments and communicate with the bank (if the apartment is encumbered with a mortgage).
Everything depends on the specific features of the apartment, the characteristics of the building (in which it is located), and the buyer's preferences.
The results of the inspection are summarized in a report, sent to the buyer's email address, and discussed with the buyer. If during the inspection we do not identify any significant problems, or if the existing problems can be resolved, the buyer usually decides to proceed with the purchase of the apartment being checked.
Contact our company "KOM-INVEST" - our lawyer will perform an apartment inspection, draw your attention to risk factors, and suggest solutions to eliminate problems!
If you are interested in detailed information and a step-by-step mechanism on how a real estate purchase transaction in Latvia is conducted, see the information here
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Phone number: +371 29774775
Email: info@kominvest.com
Skype: KOM-INVEST