We represented “YIT LATVIJA” (“YIT”), part of the YIT Group – a major construction company in Northern Europe and the largest in Finland – in a dispute over the legality of a construction permit issued to YIT.

Essence of the dispute

In this matter, more than 40 applicants challenged a construction permit issued to YIT to build an apartment building. The planned building will be located in a district of Riga with comparatively dense construction of residential buildings.

Importance of the case & successful outcome for YIT

The case is significant because it affects a broad range of issues important for the construction industry: community participation in the construction process, neighbours’ rights versus the developer’s rights to construct their own property, issues of traffic organisation and the like.

Although the application challenging the construction permit indicated several alleged technical deficiencies in the particular construction scheme (all of them were rejected by the court as unproven and unsubstantiated), during the case review it became clear that the applicants’ principal objections were aimed at the particular construction scheme as such. Namely, the applicants wanted the particular land plot to remain vacant.

The regional court supported YIT’s position and recognised that YIT’s construction permit was legal. While reviewing the applicant’s cassation claim, the Senate of the Republic of Latvia let the judgment of the regional court stand.

In the meanwhile, the Senate expressed several important findings in relation to involvement by the public in construction and territorial planning processes that will hopefully decrease the number of unfounded construction permit challenges in future:

  • “[..] construction of immovable property is one of the ways of exploiting ownership title. Therefore, in a situation where an issue on use of a land plot, subject to territorial planning principles, has already been resolved during the territorial planning phase, use of the ownership title in a particular manner can be limited solely for the purpose of securing specific rights protected by law. General objections expressing the surrounding residents’ dislike for an object to be newly built do not substantiate such an interest that should be protected.”
  • “The purpose of court control is to eliminate a violation claimed by a person instead of eliminating doubts about non-compliance of the construction with legal norms.”

Likewise the Senate rejected the applicants’ arguments that construction on the YIT land plot should not be allowed at all because the land plot was needed for parking by local residents:

  • “Legal norms do not protect a general interest to use a land plot which belongs to another person, in one’s own interest.”
  • “[..] neighbours’ concerns as such, that the expected construction would make it difficult to park cars around the planned building, cannot be considered as sufficient to prove the unlawfulness of the planned construction and a violation committed against neighbours. The car-park issue should be primarily solved by applying means of traffic organisation.”

You can read the full Senate judgment (in Latvian) for the particular case here.

Length of litigation

In this matter, the length of litigation is worth mentioning. That is, more than six years passed following issue of the construction permit (it was issued on the basis of the previous regulation, namely, with rights to immediately start construction work) until the Senate judgment (for over three years the matter was under review by the Senate).

Therefore, although the case outcome was favourable for YIT and the planned construction intention will be implemented, the matter serves as clear proof that unfounded complaints can freeze construction for a significant period; in other circumstances this length of time could mean an end to the project. Thus, amendments to the regulatory framework would be highly desirable so that challenging a construction permit does not automatically stop its operation.

Our advice and team

Legal assistance in this matter was provided and the client was represented at court by partner Lelde Laviņa with senior associate Jorens Jaunozols.