Lawyer warns apartment buildings can become a target for 'raiding'; buyers should check ownership structure

Latvian lawyer and former deputy director general of the State Revenue Service Kalvis Vītoliņš has warned about a new kind of threat to apartment buildings. In his commentary, he says that control over a building's management can increasingly end up in the hands of just a few people, leaving individual owners without a real say over their property. The phenomenon has been described as a new form of raiding; similar situations have already occurred in shared garages and garden cooperatives.

According to Vītoliņš, the risks can often be spotted before buying a flat. One key sign is when most of the apartments in a building belong to one person or a small group. Such owners may then have decisive influence over votes by the community of apartment owners, for example on maintenance arrangements and payments that all owners have to cover. This creates a conflict of interest – the same person can both influence a decision and be its main beneficiary.

Special caution is needed when a building is still in co-ownership and is due to be divided into separate apartment properties. Before the division, owners should reach clear agreements on decision-making, control over spending, and protection of everyone's interests. If that is not done, minority owners may find it much harder to influence management after the split, since majority votes become decisive.

The problem is often noticed only when it is too late. In such cases, Vītoliņš says, a lawyer may have to answer that selling the property is possibly the most rational option, because the existing ownership structure no longer allows meaningful influence.

The author stresses that buyers should check not only the flat itself but the whole building – who owns the other apartments, how decisions are made, and how common funds are managed. He also notes that recent legal changes allow illegal management decisions to be challenged without any time limit. A dissatisfied owner may become so inconvenient that the majority buys out their flat at a good price, even above market value. Where unfair management has become entrenched, the minority may end up paying considerably more, but even then living in such a building may still be cheaper than renting. Vītoliņš adds that renting in Latvia currently costs more than a bank loan, but this situation will not last long.