WIDEN Latvia Client's rent increase legal proceedings successfully concluded

June 27, 2022

After almost two years of legal proceedings Supreme Court of the Republic of Latvia adopted a decision in case No. SKC-228/2022, by which it decided not to initiate cassation proceedings, thus leaving in force the judgment of the Civil Cases Division of Kurzeme Regional Court, by which the claim of the client of WIDEN Latvia regarding an increase of the rental payment has been satisfied.

In its judgment, Kurzeme Regional Court specified that the warning on the increase of the rental payment has to include the items of management expenses and the profit comprising the amount of the monthly rental payment requested by the landlord.

In its judgment, Kurzeme Regional Court established that the notice sent to the defendant does not contain an itemised list of items comprising the rental payment (economic justification of amendments to the rental payment), emphasising that the landlord is entitled to bring the claim to court only if the tenant, being fully informed on the reasons (financial justification) of increase of the rental payment, has not agreed to the offer of the landlord.

This notwithstanding, Kurzeme Regional Court established that the objections of the defendant against the claim are justified not by the circumstance that the claimant has failed to prove the necessity to increase the rental payment (to submit a financial justification for increasing the rental payment), but rather by the fact that the claimant as the new owner of the apartment does not have any rights at all to increase the rental payment being paid by the defendant. At the same time, Kurzeme Regional Court took into consideration that the defendant has not agreed either with the amount of the rental payment specified in the warning sent before bringing claim, or the amount of the rental payment maintained in the appellate court, even though the claimant has filed to the appellate court an itemised list of items comprising the rental payment, which has been communicated to the defendant, as well.

Therefore, there are no grounds to consider that the claimant, by specifying a particular financial justification of increase of the rental payment (items comprising the rental payment) during the legal proceedings, would have infringed upon the rights of the defendant to make a choice regarding the amount of the rental payment specified by the claimant and to subsequently agree with the claimant upon the increase of the rental payment without intervention of the court.

Thus, the court division recognised that, by specifying the items of the particular rental payment, when the claim has already been filed with the court, without a warning being separately sent to the defendant under out-of-court procedure, the condition of the defendant has not been deteriorated and the dispute between the parties regarding determination of the rental payment specified in the warning is to be resolved in court.

Furthermore, Kurzeme Regional Court specified that the binding effect of the concluded tenancy agreement (rental contract) laid down in Section 8 of the law On Residential Tenancy is to be applied not only to the duties of the new owner (landlord), but also to the rights of the landlord provided for therein.