A loan is available for the purchase of land for the termination of shared ownership

From July 27, the development financial institution “Altum” starts offering loans for the purchase of land to apartment owners of multi-apartment buildings, who will use the right to terminate forced shared ownership.
The purpose of the loan is to promote the availability of financing for those owners of apartment buildings who want to use the mechanism established in the Law on Termination of Forced Shared Property in Privatized Homes, but who do not have the financial means to pay part of the expropriation price. The minimum amount of the loan will be 10 thousand euros, and it will have to be repaid within a period of up to 20 years. The loan interest rate is fixed – 5.9% per year – or variable. The variable rate consists of the fixed part – 1.82% and the variable rate of the State Treasury loan to state capital companies, which is determined when the loan is granted – and the variable part: the six-month Euribor rate. Collateral is a commercial pledge on the right of claim against the apartment owners, resulting from transactions between the authorized person and the apartment owners. The information published by the development financial institution “Altum” states that you can apply for a loan if:

• residents have voted to finance the purchase of expropriated land (the decision is adopted if the apartment owners who represent more than half of all apartment owners (50% +1) vote “for”. If the apartments are jointly owned, then 100% of the vote is required);
• the notification of the State Land Service on the expropriated land and the expropriation price has been received;
• a sworn bailiff’s act on the exercise of the right of expropriation has been prepared;
• household debts for received services (management, waste, heat supply, water, etc. services) are less than 10% of the sum of all service bills during the last 12 months;
• there is a reasonable possibility of repaying the loan;
• a credit institution’s refusal to grant a loan has been received.

Funding will be allocated using the already implemented “Altum” support program for apartment building repairs and surrounding area improvement works. The LV portal previously wrote that the granting of a loan for the purchase of expropriated land is determined by Cabinet of Ministers Regulation No. 481 “Conditions of the support program for construction works in multi-apartment buildings and improvement of their territories” in the amendments, which entered into force on May 27. If the apartment owners want to use the right provided by the law to buy the land, then the decision on concluding a contract for receiving financing must be made by the association of apartment owners of multi-apartment residential buildings.

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PHOTO: Zane Biter, LETA