Apartment co-ownership societies will gain the right to take loans for the renovation of residential buildings

The Saeima today adopted in the final reading amendments to the Apartment Ownership Law, which grant apartment co-ownership societies the right to independently obtain loans from credit institutions for the renovation of residential buildings, reports LETA.

According to the amendments, in relations with credit institutions, the apartment co-ownership society will be equated to a legal entity. This will give societies the right to open current accounts and enter into contracts with banks to obtain loans for the renovation of residential buildings.

In order for credit institutions to identify the co-ownership society as a client, each such society — both existing and those that will be created in new buildings — will be assigned a name and an identifier. This will be carried out in the Construction Information System by the State Bureau of Construction Control. The annotation to the draft law states that the State Land Service is already transferring current data from the state real estate cadastre to the Bureau of Construction Control, including data on the division of residential buildings into apartments, and residents will not have to take any additional actions.

The law also stipulates that the official representative of the co-ownership society will be considered the building manager registered in the register of managers maintained by the State Bureau of Construction Control. Thus, third parties will be ensured public and reliable access to information about the society — its name, identifier, and representative.

Since co-ownership societies participate in various transactions, such as the supply of utilities, they are considered a party to the transaction obliged to identify and disclose their actual beneficiary. The amendments establish the procedure by which such information is submitted to the Register of Enterprises.

In addition, the amendments provide that apartment co-ownership societies will not need to register with the State Revenue Service as economic entities and taxpayers if their income from economic activities during the reporting year does not exceed two minimum monthly wages established in the country. This innovation is aimed at simplifying accounting, as such societies typically receive small incomes, for example, from renting out the walls of the building for advertising. These funds can be directed towards the development of the residential building, note the authors of the amendments.