Reservation agreement

A reservation agreement (rezervační smlouva) secures for a prospective buyer that, for a certain time, the property will not be offered to anyone else. It is usually made with a real estate broker, often with the seller as a party too, and the buyer pays a reservation fee. The law does not regulate it as a separate type of contract; it is an unnamed contract under Section 1746 of the Civil Code. When a broker is a party, it is assessed under Act No. 39/2020 Coll. on Real Estate Brokerage.

What it usually contains

• identification of the property and the purchase price
• how long the reservation lasts
• the amount of the reservation fee, where it is paid and what it is credited against (often the commission)
• what happens to the fee if the purchase does not go ahead

What the law and the Supreme Court say

Under Section 14 of the Real Estate Brokerage Act, a client who is a consumer cannot be obliged to sign a purchase contract or an agreement on a future contract. The Supreme Court (case 33 Cdo 1507/2022) treated a three-party reservation agreement with a broker as a brokerage contract: the obligation to buy and the contractual penalty for breaching it were void, and the broker could not keep the reservation fee as a penalty. The rest of the agreement remains valid.

In addition, a brokerage contract must not be in the same document as the purchase contract; according to legal commentary this also applies to an agreement on a future contract. If the fee is agreed as an advance on commission, for a consumer it may not exceed two thirds of the commission.

Points to watch

A reservation does not transfer the property and does not show up in the land register. Before paying, it is worth seeing the title deed extract and the information on defects the agent must provide under the duty to disclose. The agreement should state clearly when the fee is refunded - for example if the buyer does not get a mortgage or a defect they did not know about comes to light.

Frequently asked questions

Is a reservation fee the same as a deposit on the price?

Not necessarily. It depends on the agreement: the fee may be credited against the agent's commission or the purchase price, or refunded if the deal fails. It is safer to pay the purchase price itself through an escrow.