Latvian Tax Authority Resells Property Already Bought at Auction After Buyer Skipped Land Registry Step

A company in Latvia has found itself in an unusual legal predicament after a property it legally purchased years ago at a court auction turned out to have been claimed by the state and resold to another buyer.

The root of the problem lies in the fact that the auction buyer failed to promptly register its new ownership in the Land Register. Under Latvian law, this registration step is required for ownership rights to become fully valid and protected against claims from third parties.

How the state became the owner

Because the official Land Register still listed the property under the name of its previous, now-deceased owner, and no heir had come forward or formally accepted the inheritance, the state classified the property as heirless (ownerless) estate. Under existing rules, such property transfers into state ownership.

The State Revenue Service, acting as administrator of heirless property, subsequently sold the property to a new buyer, who may not have been aware of the underlying legal complications.

Compensation claim

The company that had originally bought the property at auction, but had not completed or realized the need to register its ownership in the Land Register, is now pursuing the State Revenue Service for compensation over the lost property.

The case highlights the importance of promptly completing all legal formalities after acquiring real estate, including property obtained through auctions, in order to avoid similar disputes in the future.