Buying Property Without Risk

2. Vetting the seller: insolvency and enforcement

The Land Registry shows you the status of the property, not the status of the seller. That is why I recommend also checking the person or company you are buying from:

• ✓the insolvency register (isir.justice.cz): free of charge, you can check whether insolvency proceedings are underway against the seller
• ✓the central register of enforcement proceedings kept by the Czech Chamber of Bailiffs: checks whether enforcement proceedings are registered against the person or company
• ✓for legal entities, the public register (veřejný rejstřík): whether the company actually exists and who is authorized to act on its behalf

Selling property while the seller is insolvent or subject to enforcement is risky: an insolvency administrator or enforcement officer may, in some cases, challenge such a transfer as a voidable legal act, and you could lose the property even after paying for it. If you come across an entry in either register, do not sign anything without a consultation.

For legal entities, it is also worth checking in the public register who is actually authorized to act on behalf of the company and whether it is represented only by an authorized intermediary without sufficient authority. A signature by a person without a proper power of attorney can mean the agreement never came into existence at all, and the whole process has to be repeated.

3. Reservation agreements: pitfalls with real estate agencies

A real estate agency will usually ask you to sign a reservation agreement and pay a reservation fee before the purchase agreement itself. The purpose is legitimate: taking the property off the market. The problem tends to be in the details:

1. 1Read carefully under what conditions the fee is non-refundable. A common clause stating that "the fee is forfeited if the buyer withdraws from the purchase for any reason" is unfavorable to you, for example if your mortgage does not come through.
2. 2Check who the fee is paid to. It is safer if it goes into attorney or notary escrow, not directly into the real estate agency's account.
3. 3Check the amount of the contractual penalty in case you withdraw from the reservation. The penalty should be reasonable, not tens of percent of the purchase price.
4. 4Make sure the reservation agreement includes a deadline by which the purchase agreement must be prepared and signed, and what happens if the seller fails to meet it.

A reservation agreement is not mandatory and you do not have to sign it on the spot. Send it to me for review before you agree to anything.

4. The purchase agreement: what it must contain

A property purchase agreement must be in writing and the signatures must be officially certified, otherwise the Land Registry office will reject the registration application. Besides that, it should contain:

• ✓an exact identification of the property according to the Land Registry data (parcel number, municipality, cadastral area)
• ✓the purchase price and a clearly described payment method through escrow
• ✓the seller's representation on the legal status of the property and that it carries no restrictions other than those stated in the agreement
• ✓the date and manner of handover of the property
• ✓provisions on liability for defects and on who pays the administrative fee for the Land Registry entry
• ✓reasonable contractual penalties in case either party defaults

I recommend not using a generic template downloaded from the internet without changes. Every property has its own specifics, for example a co-ownership share in the common parts of a building or an existing lease, and the agreement should reflect them.

5. Escrow of the purchase price: why you should never pay directly

Paying directly into the seller’s account before the Land Registry entry is the most common way people lose money when buying property. The only safe option is escrow with an independent third party, usually one of the following:

• ✓attorney escrow: the money is held in a special insured bank account; since 2026 escrow has been mandatorily recorded in the Czech Bar Association's Electronic Escrow Register, and clients are additionally protected by the Bar's Guarantee Fund
• ✓notary escrow: a similar principle with a notary, often combined with the form of a notarial deed
• ✓bank escrow (a blocked account): the bank holds the money under an escrow agreement; it tends to be more expensive and slower to arrange

The principle is the same in all cases: the seller only receives the money once the Land Registry has registered you as the new owner. If the seller or the real estate agency proposes a direct payment ”to keep things simple”, treat it as a warning sign. I recommend insisting on escrow always, regardless of how trustworthy the other side seems.

6. Application for entry in the Land Registry: procedure and deadlines

Ownership of a property only arises upon registration in the Land Registry, not upon signing the agreement. The process has these steps:

1. 1Filing the application for entry with the relevant Land Registry office, in person, by post, via a data box, or electronically through the ČÚZK portal.
2. 2The Land Registry office immediately flags the property with a pending registration note (plomba), signalling that proceedings on the change of owner are underway.
3. 3Under Sections 16 and 18 of the Land Registry Act (Act No. 256/2013 Coll.), a 20 day protection period runs: the office notifies the owner and any persons whose rights could be affected by the entry, and only allows the registration once this period has elapsed.
4. 4If nobody objects, the office processes the matter and completes the entry, usually within a further few weeks after the protection period ends.
5. 5After registration you receive a notification and a new extract from the Land Register. Only at this point is the purchase price released from escrow to the seller.

The administrative fee for the entry is, under Item 120 of the Schedule to Act No. 634/2004 Coll., on Administrative Fees, CZK 2,000 for each application filed. For electronic filing through the ČÚZK portal, the fee is reduced by 20%. Overall, from filing to registration you should expect several weeks, in straightforward cases usually six to eight weeks.

7. Taxes, handover, utilities, and the difference between a new build and an older property

Taxes and fees

The real estate acquisition tax has been abolished, so buyers no longer pay it. After the purchase, however, do not forget to file a real estate tax return with the tax office, under Section 13a of Act No. 338/1992 Coll., on Real Estate Tax, by 31 January of the tax period following the year in which you became the owner. On top of the administrative fee for the entry (CZK 2,000), you will usually only have the fee for preparing the agreement and escrow, no other recurring fee arises when buying between private individuals.

Handover of the property and utilities

At the physical handover, draw up a handover protocol with the meter readings for electricity, gas and water, together with the handover of keys and any documents (inspection reports, manuals, warranty certificates). Arrange to have the utility suppliers transferred into your name as soon as possible; for a flat in an owners’ association or a housing cooperative, do not forget to report the change of owner to the administrator or the committee. Do not neglect property insurance either: arrange it to start on the actual handover date, not the date of the Land Registry entry, so the property is not left uncovered in the meantime.

New build vs. older property

For a new build bought from a developer, under Section 2129 of the Czech Civil Code you have the right to claim hidden defects in the building, generally for five years from acquisition (for property, from registration of ownership in the Land Registry), if you are a consumer; this period cannot be shortened by agreement (for a turnkey build under a contract for work, Section 2629 applies similarly). Ask for the occupancy permit, or proof of a building permit if the building does not require an occupancy permit. For an older property this kind of warranty does not apply, but the seller is liable for defects that they knowingly concealed. That is why, before buying an older house or flat, I recommend considering a technical survey by an expert, a legal review of the agreement cannot replace it.

Frequently asked questions about buying property

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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