The information was translated using the ChatGPT service.
In the Cabinet of Ministers meeting on 23rd May this year, amendments prepared by the Ministry of Economics to the Support Program for Construction Work in Multi-Apartment Buildings and their Territory Development were approved. These amendments introduce a new support measure - a loan for a multi-apartment building for the purchase of specific alienable land or payment of the alienation price. The support program is administered by the Development Financial Institution "Altum", which plans to start accepting loan applications in July of this year.
The support measure was designed to facilitate financing for residential building owners (apartment owners) who wish to use the mechanism provided by the Law on Ending Forced Shared Ownership in Privatized Multi-Apartment Buildings to terminate forced shared ownership with landowners or owners. However, they lack their own available financial resources for the respective alienation price part payment and do not meet commercial bank lending policies. Specifically, it is envisaged that only those communities of apartment owners in multi-apartment residential buildings that will use the alienation right provided for in this law and will purchase the alienable land according to the procedure specified in the law can apply for the loan.
The problem of forced shared ownership affects 3,544 privatized multi-apartment residential buildings, which have 129,918 apartment properties in Latvia. The planned support measure will help achieve the law's objective - to create a unified land and building property to eliminate the negative effects of legal relations created during land reform and privatization, thereby reducing existing social tension in society on land reform and housing privatization issues (e.g., apartment owners' dissatisfaction with the obligation to pay rent to the landowner, disputes over the amount of rent) and promoting social justice in housing (giving apartment owners the opportunity to acquire land in ownership and manage their property with greater clarity about the future) and following the general principle of the Civil Law on the unity of land and building.
It is planned to grant the loan within the framework of the existing "Altum" implemented support program for construction works in multi-apartment buildings and their territory development (so-called Repair Fund Program), complementing the existing support program with a new type of loan - an alienable land purchase loan. Loans are planned to be issued within the available financing of the repair fund program (31 million euros).
Support recipients can be apartment owners included in the multi-apartment residential building community - natural and legal persons who need financing for the alienation price (or its part) payment. The multi-apartment residential building community can apply for a loan through an authorized person's mediation.
The loan will be granted only to those apartment owners of multi-apartment residential buildings who will use the alienation right provided for in the Law on Ending Forced Shared Ownership in Privatized Multi-Apartment Buildings and will buy out the alienable land in the manner specified by law (for example, this will not apply to multi-apartment buildings located on municipally/state-owned land).
The maximum loan term is planned for 20 years; there are no restrictions on the loan amount, considering that it is currently impossible to predict the maximum alienation price. More detailed conditions for receiving a loan will be known shortly before the start of accepting loan applications.
As is known, within the framework of the Altum-implemented Repair Fund Program, residents have had access since September 2021 to a state loan for construction works and territory development works in multi-apartment residential buildings, including houses in less developed regions, small towns, or villages, or those that for other reasons do not meet commercial bank lending policies. A loan can be obtained for construction work on the enclosing structures of a multi-apartment building, for example, exterior walls and windows, and in shared spaces, including elevator modernization or replacement; for the renewal, reconstruction, or creation of all types of engineering systems in a multi-apartment house; for territory development; for financing costs not covered by the multi-apartment house energy efficiency enhancement program; as well as for project management, author supervision, and construction supervision.
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