Inga Bite: Land Legal Use Fee Compensation – How Parliament Plans to Fulfill Constitutional Court Ruling?

Latvia's parliament is grappling with how to implement a Constitutional Court ruling concerning compensation for landowners whose property is legally occupied by buildings owned by others. This issue, often referred to as the "compulsory lease" or "legal use fee," has been a long-standing dispute between landowners and building owners, with the Constitutional Court issuing multiple judgments.

The current debate centers on a bill drafted by the Justice Ministry, which is undergoing inter-agency coordination. The proposal suggests setting the existing legal use fee (4% of cadastral value annually) as a minimum. Building owners would also be required to cover the actual property tax. If a landowner finds the minimum fee insufficient, they would have the right to take the matter to court, which would have the final say on the fee amount. This approach echoes a previous system but raises concerns about the potential burden of litigation on all parties involved, especially since the ministry lacks data on the number of such cases.

Simultaneously, a separate bill is before the parliament to address compensation for landowners in specific scenarios. The Constitutional Court mandated that landowners receive adequate compensation when the legal use fee is insufficient to cover property taxes, is equal to the tax amount, or leaves the landowner with a disproportionately small return after tax payment. However, the current draft bill only addresses the first of these three conditions, when the legal use fee does not cover the property tax.

Legal expert Inga Bite highlights the complexity and historical nature of this dispute. The court's ruling in December 2025 placed the onus back on the legislature to revise the legal use fee and establish a compensation mechanism. The ongoing discussions aim to balance the rights of landowners and building owners while ensuring a fair and legally sound resolution to this protracted issue.

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Tomēr neraugoties uz to, Saeimai iesniegtais likumprojekts paredz kompensācijas izmaksu tikai vienā no šiem gadījumiem – tad, ja likumiskās lietošanas maksa nesedz nekustamā īpa.