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17.10.2019

Right of superficies – possibility to build on land owned by another person

Kristīne Gaigule-Šāvēja, Partner at PRIMUS DERLING, Attorneys at Law, and Laura Skromule, Senior Associate at PRIMUS DERLING, Attorneys at Law, have looked at the practical issues of enforcement of the right of superficies, and outline certain problem issues faced by persons intending to exercise the right of superficies.

On 1 January 2017, amendments to the Civil Law came into force, introducing a completely new legal institute in Latvia – the right of superficies.

As stipulated by Article 11291 of the Civil Law – the right of superficies is a right to erect and use on a foreign plot of land a non-residential building or an engineering structure as an owner during the validity of the right of superficies.

Thus, on its merits, the right of superficies provides for the possibility of constructing a non-residential building or an engineering structure (e.g., a water pipe, a bridge) on a land plot not owned by the owner of that building or engineering structure, as well as using such building or engineering structure after completion of the construction process. It should be noted that it is not possible to construct a residential building on the basis of the right of superficies – such procedure has not been envisaged by the legislator. For this reason, the users of the right of superficies will most often be real property developers intending to develop a particular area or object, as well as companies wishing to expand or improve their area of operation, and individuals wishing to develop their own real property.

The Civil Law defines the right of superficies as a property right, and it is subject to the provisions applicable to immovable property. Exceptions are the right of first refusal and the right of pre-emption, which are not applicable to the right of superficies.
It is important to record the right of superficies in the Land Register after the conclusion of the contract on the right of superficies – Article 11293 of the Civil Law provides that a property right arising from the right of superficies shall be established and effective only after the registration thereof in the Land Register.

The superficiary must take into account that after the expiry of the contract on the right of superficies, the building or engineering structure built on the land plot transferred for the right of superficies will not remain in the legal ownership of the superficiary, and the superficiary will no longer be able to deal with it.

Termination of the contract on the right of superficies

Article 1129-7 of the Civil Law provides that, prior to the expiration of time period of the right of superficies registered in the Land Register, the right of superficies shall terminate by:

  • a confusion of the rights in one person;
  • a judgment of a court;
  • mutual agreement.

The full version of the article in the Latvian language is available at DBHUB.LV