Attorney Escrow

What attorney escrow is and what I will arrange for you

Under the Czech Legal Profession Act, an attorney is authorized to accept money and documents into escrow for the purpose of releasing them to other persons. In practice, this means that in a property purchase I act as a neutral third party between the buyer and the seller: I hold the purchase price in a dedicated account and pay it out exactly according to the rules both parties agreed on in writing beforehand.

• ✓A written escrow agreement tailored to your transaction
• ✓A dedicated escrow bank account, separated from the attorney's own assets
• ✓Reporting the escrow to the Czech Bar's Electronic Escrow Register before the money is received
• ✓Checking the payout conditions: Land Registry entry, deletion of mortgages
• ✓Payout of the purchase price to the seller and written confirmation for both parties
• ✓Alignment with the purchase agreement; I usually draft both contracts together

When to use attorney escrow

The most common case is buying or selling property. Several weeks usually pass between signing the purchase agreement and the registration of the new owner in the Land Registry: the Land Registry office cannot approve the entry before a 20 day protective period expires, and in practice it usually decides within about 30 days. It is precisely this gap that creates the risk escrow solves. The buyer does not want to pay before being registered as the owner, and the seller does not want to give up the property without certainty of actually receiving the money.

Escrow is not only for real estate, though. It is useful wherever the parties to a transaction need certainty that the other side will perform its part of the deal: settling co-ownership or marital property, transferring a share in a company, or settling a dispute where payment is made only once agreed conditions are met.

I never recommend paying the purchase price directly into the seller's account before the Land Registry entry, no matter how trustworthy the other side seems. If the counterparty or the real estate agency insists on a direct payment, treat it as a warning sign.

How attorney escrow works and how the money is protected

The foundation is a written escrow agreement. It must clearly identify who deposits the money, the amount and currency, and under what conditions and to whom the money is paid out. I may only handle the escrowed funds exactly as the agreement expressly provides; the law and the Bar's professional rules allow nothing else.

• ✓A dedicated escrow account: the money sits in a bank account kept separately from the attorney's own assets and designated as an attorney escrow account. A separate account is used for each escrow, and cash deposits and withdrawals are prohibited on it.
• ✓The Electronic Escrow Register: every escrow must be reported to the Electronic Escrow Register kept by the Czech Bar Association before the money is received into the escrow account. The Bar therefore has an overview of every escrow, and its supervisory board can verify the data directly with the banks.
• ✓The Bar's Guarantee Fund: clients are also protected by a guarantee fund at the Czech Bar Association, which covers escrows established from 1 January 2026 and can compensate clients harmed by an attorney's criminal conduct in connection with an escrow. The claim is conditional on the attorney having duly reported the escrow to the Electronic Escrow Register, one more reason to work only with an attorney who follows the rules.
• ✓The attorney's insurance: every attorney carries mandatory insurance against damage caused when providing legal services. The insurance does not cover intentional unlawful conduct, which is exactly why the law added strict escrow registration and the Guarantee Fund as further layers of protection.
• ✓Payout strictly under the agreement: the money is released only once the agreed conditions are met, for real estate typically upon presentation of a Land Registry extract showing the new owner, and where relevant after deletion of a mortgage. Both parties receive confirmation of every step.

The rules for attorney escrow were tightened considerably by an amendment to the Legal Profession Act effective from 1 July 2024 and by the follow-up professional regulations. Today's attorney escrow is a far more closely supervised instrument than the one the public remembers from past media cases.

Attorney, notary, or bank escrow?

All three routes lead to a safe transfer of the money; they differ in price, speed and flexibility:

• ✓Attorney escrow: statutory regulation, professional oversight by the Czech Bar, registration in the Electronic Escrow Register and, for escrows established from 1 January 2026, the Guarantee Fund. It is usually the cheapest and most flexible option, and the attorney typically drafts the purchase agreement too, so the payout conditions match the deal precisely.
• ✓Notary escrow: rules very similar to attorney escrow, including the level of security. Its fee follows the notarial tariff. It is often used where the transaction takes place before a notary anyway, for example in the form of a notarial deed.
• ✓Bank escrow (a blocked account): the bank holds the money under its own contractual documentation and internal rules. Arranging it can be more complicated, and therefore also take longer, and the payout conditions are less flexible because the bank works with its own templates.

I do not recommend escrow with a real estate agency: it is not subject to professional oversight or to the special statutory regulation that applies to attorney and notary escrow. Both the reservation fee and the purchase price belong with an independent third party.

How the escrow proceeds in practice

Price: based on the amount held in escrow

The fee for attorney escrow depends on the amount held and the complexity of the payout conditions; for a smaller flat it typically runs into thousands of crowns. I will tell you the exact price, in advance and in writing, before you commit to anything. If I also draft the purchase agreement for you, we will usually agree a better price for the whole package: checking the legal status of the property, the purchase agreement, the escrow, and the Land Registry application.

Compared with the value of the transaction, which usually runs into millions of crowns, the cost of escrow is negligible. The risk of paying directly and losing the money is not worth the saving.

How we will work together

Who will handle your case

Ing. Mgr. Tomáš Beneš

Attorney registered with the Czech Bar Association, based in Prague.

Law degree from Charles University. I focus on business law, real estate and employment disputes. I handle every case personally, no assistants.

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Frequently Asked Questions: Attorney Escrow

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