On Tuesday, 15 September, the Judicial Policy Sub-Commission of the Legal Commission will review the draft law “Amendments to the Civil Law”, developed by the Ministry of Justice and other involved authorities, which provides for improvement of the legal framework for distribution of the joint property and new mechanisms for settlement of disputes arising between joint owners, including in the case of distribution of the joint property.
Jānis Bordāns, the Minister of Justice: “The draft law provides the types for termination of the joint property corresponding with modern circumstances, in order to prevent dishonest behaviour of legal persons in distribution of the joint property, as well as in order to protect interests of honest joint owners and non-disturbed used of property rights. The draft is developed by balancing the interests of all joint owners.”
J.Bordāns invites the sub-commission of the Saeima to move further the review of the draft during the meeting of the Saeima in the more operative and high quality way, as far as this is an urgent issue of the legal framework, which needs to be settled in an urgent manner. At the same time the Ministry of Justice will continue to work on additional amendments to the Civil Procedure Law, in order it would be possible to effectively implement the above-mentioned legal mechanisms, and will also look for additional solutions on how to ensure protection of interests and rights of joint owners in more efficient way.
The draft law mainly provides for three important things:
- Restrictions to request distribution of joint property.
Amendments to the law provide for a restriction to request to a court the distribution of the joint property without any important reason for five years from acquisition of undivided shares of the residential building in the property. Important reasons, for example, would mean cases, when one joint owner is being prohibited from the part of other joint owners the possibility to use his or rights of the joint owners. Or the circumstances that other joint owners do not perform the duties of the joint owner determined in the Civil Law and the whole burden of maintenance of the joint property lies on this one joint owner, as well as other circumstances that according to the opinion of the court would be considered as enough important. It is important to note that this regulation will refer only to those persons, who will acquire undivided shares in the property after this regulation coming into force.
- Exclusion of malevolent joint owner.
The draft law provides for a possibility for the majority of joint owners to claim for alienation of the undivided share of the joint owner, who misuses his or her rights of the joint owner or fails to perform the duties of the joint owner as an honest and careful owner should, causing significant harm to other joint owners or third persons. It is possible to claim for exclusion of one joint owner, when the joint owners, who in total own more than a half from undivided shares of the joint property, want it.
- Types and conditions for distribution of the joint property.
The draft law provides broader possibilities than a court to settle the disputes of joint owners. If current practice shows that the primary type of settlement of disputes of the joint property is sale of the joint property by auction, then it is planned that the amendments will provide a possibility for a court to settle the disputes by correlating as much as possible the different interests of joint owners. Namely, in accordance with the amendments developed, a court will be able to decide in alienation of a par of the joint property instead of alienation of the whole property in cases, when such type of distribution, according to the principle of honesty, considering the general legal principles, is the most appropriate type of distribution. Besides, the draft law also provides to supplement the Civil Law with the regulation on distribution of residential buildings into apartment properties as the primary (but not the only) type of distribution of the joint property with regard to the residential buildings being in the joint property.
The draft law also provides other changes for improvement of the legal framework of the joint property.