Recently, there has been an increase in activity in the real estate market; however, many buyers do not know that starting this year, the purchase of housing is influenced not only by price and location but also by debts. The principle of 'debt follows the apartment' has come into effect, meaning that when purchasing real estate, the new owner assumes payment obligations for maintenance for the last three years. Does this create additional risks for buyers?
Buying an apartment is one of the largest transactions in life for many, reports TV3 News. However, starting this year, new owners should be aware that along with the apartment, debts of the previous owner may also transfer. The principle of 'debt follows the apartment' means that the new owner takes on the responsibility for debts related to utilities, property management costs, and contributions to the reserve fund. At the same time, debts older than three years will still be the responsibility of the previous owner who did not make the corresponding payments.
Thus, buyers need to carefully check the information. There are situations in the real estate market where payments for an apartment have not been made for an extended period. Usually, the amounts are small, but if the owner was unscrupulous, they can quickly grow.
“There was one property in Teika — there was a debt of 3000 euros, but during the transaction, an agreement was reached — we pay off the debt, and therefore the purchase occurs for the full amount, you see that the debt is settled. When the addends change, the sum does not change,” said the owner of a real estate sales company, Aigars Šmits.
Although the seller of the apartment is obliged to inform the buyer about any debts, banks recommend ensuring this independently by requesting an up-to-date statement from the management company and utility bills from the seller.
“There is a certain risk factor here, as banks do not have a common registry or database where such debts can be checked, and an unscrupulous seller may forge this document. We would recommend, if possible, to request statements with an electronic signature — this would also eliminate this risk,” noted a housing market expert from one of the banks, Artis Zeilā.
Real estate professionals believe that unscrupulous sellers are rare, and in most cases, the real situation is indicated. Nevertheless, there is always the possibility of conducting a more in-depth check for safety.
“Definitely, it is possible to find out, to contact a certified agent who will advise where this can be checked to avoid a situation where someone simply fabricated this document. There are phone numbers to clarify whether the tax has been paid or not. This is a way to protect yourself and be in the same boat with other apartment owners to jointly care for common areas, which remains a significant problem, as many believe — the facade does not belong, the elevator does not belong,” clarified Šmits.
Experts believe that overall, the new regulation can be viewed positively — it will be easier to collect debts for buildings, which in the long term may positively affect the housing stock, improve the technical condition of buildings, and help ensure uninterrupted management services.
