Lien / mortgage (zástavní právo)
A creditor's right, usually a bank's, to be paid from the property if the debtor defaults. It is on the LV and stays after a sale.
A lien (zástavní právo) secures a debt. If the debtor fails to repay properly and on time, the creditor may be paid from the proceeds of selling the pledged property (Section 1309 of the Czech Civil Code). For real estate it most often secures a mortgage loan. On property recorded in the land register it arises by entry in the register unless another law provides otherwise (Section 1316); a contractual lien is entered by registration (vklad) under Section 11 of the Cadastral Act.
How to read it
The lien appears in part C of the title sheet (LV) together with the creditor and the deed on which the entry is based. Besides contractual liens there are, for example, judicial and bailiff's liens. A filed application to create one is entered in the register as a note (poznámka) (Section 23 of the Cadastral Act).
A ban on transfer or encumbrance is often registered for the creditor along with the lien. It is entered by registration (Section 11) and binds third parties only if it was created as a property right (Section 1761 of the Civil Code).
What it means for a buyer
A lien does not itself prohibit a sale, but it stays on the property after the transfer until it is deleted from the register. The buyer therefore needs to know how and when the debt will be repaid and the lien deleted. Escrow of the purchase price can serve this purpose. While the deletion is pending, the property shows a pending-transaction flag.
Frequently asked questions
How is a lien deleted?
Once the debt is repaid, an application is filed to register the deletion. The supporting deed is usually a confirmation that the lien has ended, issued by the creditor in whose favour it is registered (Section 66 of Decree No. 357/2013 Coll.). Among other things, it must identify the property and the right that ended, state what led to its end and refer to the legal provision under which it ended.
What is a future lien?
A lien can also be created over property the debtor has yet to acquire. If the future lien is registered, it becomes an actual lien the moment the debtor acquires ownership (Section 1341).
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The explanation is general and informative, not legal advice. Binding are the land register, the zoning plan and other official sources.