Purchase contract

Under a purchase contract (kupní smlouva), the seller undertakes to hand over the property and enable the buyer to acquire ownership, and the buyer undertakes to take it over and pay the price (Section 2079 of the Civil Code). For real estate the contract must be in writing, with both parties' declarations on the same document (Sections 560 and 561). It may be preceded by a reservation agreement or an agreement on a future contract.

When the buyer becomes owner

Ownership does not pass on signature but only on entry in the land register, by registration (vklad, Section 1105). The entry takes effect as of the moment the application reached the cadastral office. By the next working day the office marks the property as affected by a change (a pending-change flag), and it can approve the entry no earlier than 20 days after notifying the owner. If the signatures are not officially certified, the applicant must prove they are genuine (Section 7 of the Cadastral Act). The price from the contract is then recorded in the land register as price data.

Escrow and contract terms

Several weeks usually pass between signing and registration, so the price is often deposited in escrow with a lawyer, notary or bank and released to the seller only after registration. An agent may arrange escrow only with a bank, notary, lawyer or court enforcement officer; the agent may hold escrow itself only on the client's written request and under statutory conditions (Section 4 of Act No. 39/2020 Coll.). The brokerage contract may not be on the same document as the purchase contract. The contract should cover:

• the property's condition and known defects
• the date and manner of handover
• removal of mortgages from the purchase price
• what happens if the land register refuses the entry

Defects and area

The buyer must notify the seller of a hidden defect of a building within five years of acquiring it; otherwise, if the seller objects, a court will not grant the buyer's claim. This does not apply if the seller knew or must have known about the defect (Section 2129). If the buyer is a consumer and a defect appears within two years of handover, since 2023 the property is presumed to have been defective at handover. If a plot lacks the area stated in the contract, the buyer is entitled to a reasonable price reduction.