Escrow of the purchase price

An escrow of the purchase price (úschova kupní ceny) protects both sides of a property sale. The buyer deposits the money in a special account of a custodian - a lawyer, notary or bank - who pays it to the seller only once the agreed conditions are met. If the transfer fails, the money goes back to the buyer. Escrow bridges the time between signing the purchase contract and registration, because ownership passes only upon entry in the land register.

Who can hold the escrow

• lawyer's escrow (advokátní úschova) under the Legal Profession Act: written contract, a special account labelled “advokátní úschova” for one escrow only, cashless transfers only, and an entry in the Czech Bar Association's electronic escrow register
• notarial escrow (notářská úschova) under the Notarial Code: a protocol with the release conditions, a separate notary account, money accepted only by transfer
• bank escrow (escrow account) under a contract with the bank

Under Act No. 39/2020 Coll. an estate agent may not offer escrow itself and may arrange it only with a bank, notary or lawyer, or with a court enforcement officer in connection with enforcement or court proceedings. It may provide escrow itself only at the client's written request and under strict conditions: a written contract, a separate escrow account for each depositor and cashless transfers only.

Points to watch

The release conditions are what matters. Typically the money is released once the title deed extract shows the buyer as owner and nothing the parties did not agree on burdens the property - such as a new mortgage lien or a pending-transaction flag from another proceeding. The contract should also say when and to whom the money is returned if the land register refuses the entry, and how the buyer's mortgage or the seller's existing lien is paid.

With a lawyer's escrow, the client receives, before paying in, the bank's confirmation that the escrow account exists and a confirmation from the electronic escrow register; without them it is sensible not to send the money and to contact the lawyer or the Czech Bar Association. For money taken into a lawyer's escrow from 2026, the Bar runs a Guarantee Fund that compensates for a lawyer's criminal conduct connected with escrow - up to CZK 2,500,000, or up to CZK 5,000,000 for the purchase price of a residential property.

Frequently asked questions

Who pays for the escrow?

Who pays the custodian's fee is a matter of agreement between the parties. A notary's fee follows the notarial tariff (Decree No. 196/2001 Coll.) and is calculated from the amount held.

Is escrow required for every sale?

No, the law does not require it. It is common, though, because it protects the buyer from paying in advance and the seller from handing over the property without being paid.