Estate agent's duty to disclose (Section 12, Act 39/2020)

The duty of a real estate broker to inform is set out in Section 12 of the Czech Real Estate Brokerage Act (No. 39/2020 Coll.). The agent must give a person interested in buying or renting a property information about specific defects and restrictions on it that arise from public registers, and about those the agent knew of or, given their professional expertise, should have known of. The act uses 'interested party' (zájemce) for the client who has signed a brokerage contract with the agent.

What the act requires

• Provide the information on defects and restrictions no later than when the brokerage contract is signed. If the specific property is not yet known at that point, within 14 days of it becoming known.
• On the same terms, hand over an extract from the public register, usually the title sheet extract, showing the state no more than 3 working days before the day the contract is signed (Section 11). An extract obtained online and printed is enough.
• Disclose the commission, or how it is calculated, if the agent has also agreed a commission for the same property with someone else, for example the seller.
• If the agent fails to provide the information in time, the client may withdraw from the brokerage contract. If the extract is missing, the client has 14 days from signing to withdraw.

Who the duty is owed to

The duties under Sections 11 and 12 apply towards a person who wants to acquire or use the property and has a contract with the agent, for example when the agent signs a brokerage contract with a prospective buyer in addition to the one with the seller. They do not apply towards the seller or landlord. Typically these are entries in the land register: a mortgage, an easement, a pre-emption right, an enforcement order or a pending-change flag during ongoing proceedings.

What 'should have known' means

'Should have known' means that relying only on what the seller says is not enough. The act does not list which other sources the agent must check. A careful agent therefore also looks at public maps of flood zones, radon index, landslides and the zoning plan, and tells the client about findings in writing. nmvt's location check gathers such data from public sources in one place and marks the items the agent should tell the buyer about. The duty and the responsibility remain with the agent.