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Friday, 25.04.2025, 06:08
How to acquire immovable property in Latvia on the basis of a cession agreement
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Answer: Having considered the possible risks of flat’s purchase on the basis of a cession agreement I believe that there shouldn’t be more risks for the buyer buying a property through a cession rather than he would have upon direct and usual purchase transaction.
In theory there’s always a possibility (in any purchase transaction, i.e. with or without cession) that the seller could conclude preliminary agreement or purchase agreement with third persons prior to or even after entering into agreement with you. Moreover, a person transferring his rights on the basis of cession may also conclude other cession agreement with different persons. In such case scenario the risks of transaction may be divided into two stages: prior to registration of title to the property in state register and after.
In case if the rights of third persons will be submitted prior to registration of buyer’s title to the property and, for example, an action is filed in court regarding the ownership right, then the buyer may be protected from such actions by means of using an escrow account for the transaction. In the event third persons will file a claim and an attachment will be placed on the property, buyer’s title won’t be registered and therefore money will be returned to the buyer after expiration of escrow account’s term.
In case third persons will file an action after the registration of title to the property in the name of the buyer, then in theory there’s also a possibility that an attachment will be placed on the immovable property already registered in the name of the buyer.
In such case court will pay attention to two main factors: first one – according to law, regardless of any transactions entered into by the seller, the buyer whose rights are recorded with state register will have priority rights, but other buyer shall be compensated by the seller, and second – the honesty of the buyer because court will consider the possibility of collusion between seller and buyer, whose ownership rights recorded with state register, against the other buyer.
It shall be noted that such situation may occur upon direct transaction as well, i.e. transaction made without cession.
Law office INLAT PLUS
Brivibas 40-15, Riga, Latvia
+371 67505970
+371 26403577
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