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Understand the Kupní Smlouva

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When it comes to buying real estate in Czechia, making sure you fully grasp the property sales contract is essential.

Indeed, not fully understanding the document you will sign can lead to financial losses, including the forfeiture of deposits, payment of penalties, unexpected costs, legal expenses, and potential poor investment decisions.

We've heard countless stories of people making costly mistakes when signing their property agreement in Czechia. We want to help you avoid the same experience.

We'll give here a very brief overview regarding the property sales contract in Czechia ; if you want a full checklist, please check our property pack for Czechia.

What is the Kupní Smlouva in Czechia?

In Czechia, the property purchase agreement, known locally as "Kupní smlouva," is a crucial document in real estate transactions.

It's a legally binding contract that outlines the terms and conditions of the property sale between the buyer and the seller. This agreement serves as a formal record of the sale and is essential for the transfer of property ownership.

The Kupní smlouva typically includes details such as the property description, sale price, payment terms, and any other conditions agreed upon by both parties.

It's legally binding once signed, meaning both the buyer and the seller are obligated to fulfill their respective parts of the deal. For the buyer, this means paying the agreed-upon price, and for the seller, it means transferring the property to the buyer.

As for the guarantee aspect, the agreement protects both parties.

For the buyer, it ensures the seller is committed to selling the property at the agreed terms. For the seller, it confirms the buyer's intention to purchase and provides details on the payment.

Regarding international buyers or non-residents, there aren't significant differences in the process compared to Czech citizens.

However, non-residents should be aware of any legal or financial implications in their home country and might need additional documentation for the transaction.

The signing of the Kupní smlouva usually takes place after initial negotiations and once both parties agree on the terms. It's an essential step before the actual transfer of property ownership, which is formalized by registering the change in the property registry.

A deposit is typically involved in the transaction. The amount can vary but is often a percentage of the purchase price. This deposit demonstrates the buyer's commitment and may be forfeited if the buyer backs out of the deal unjustifiably.

When comparing the property purchasing process in Czechia to other countries, there are similarities and differences. One notable aspect is the emphasis on formal contracts and legal procedures, which is common in many European countries.

However, specific terms, conditions, and legal requirements can differ, reflecting local real estate laws and practices.

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What should be included in the property purchase agreement in Czechia?

In Czechia, the property purchase agreement, or "Kupní smlouva," must adhere to specific requirements to be valid and enforceable.

The governing law for these agreements is primarily the Czech Civil Code (Občanský zákoník), which outlines the legal framework for real estate transactions.

The agreement should contain essential elements, including:

- Identification of both parties (buyer and seller), typically with full names and identification numbers.

- A detailed description of the property, including its location, size, and any relevant details about the land or building.

- The purchase price and payment terms, detailing how and when the payment will be made.

- Any rights and obligations of both parties, such as the seller's obligation to transfer the property free of encumbrances.

- A clause stating the agreement is subject to the transfer of ownership being registered in the real estate registry.

Here are some mandatory clauses include:

- Ensuring the seller has the legal right to sell the property.

- Information about existing mortgages or liens on the property.

- Stating the property complies with relevant building codes and regulations.

Some additional clauses might cover:

- Results of any inspections or surveys conducted.

- Addressing the condition of the property or certain fixtures.

Here are some conditions or contingencies can include:

- The purchase is contingent upon the buyer obtaining a mortgage.

- Allowing the buyer to have the property inspected and to withdraw if significant issues are found.

Regarding authentication, the purchase agreement for real estate in Czechia must be authenticated by a notary. This notarization is a legal requirement for the transfer of ownership to be registered in the real estate registry.

Real estate agents in Czechia can facilitate the process but don't typically have a legal role in the agreement itself. Their main function is to assist in finding the property, negotiating terms, and guiding both parties through the process.

However, they don't have the authority to authenticate agreements or alter the legal obligations of the parties involved.

What's the signing process like?

In Czechia, the process of signing a property purchase agreement, known as "Kupní smlouva," is a structured procedure.

The agreement is bilateral, meaning it must be signed by both the buyer and the seller.

Both "the buyer" and "the seller" can be multiple people. In cases of joint ownership or multiple buyers, all parties involved must sign the agreement.

Here are the required documents and information:

- Proof of ownership, property details, and personal identification.

- Personal identification and, if applicable, proof of financing or mortgage approval.

Here is the signing process and timeline:

Signing Process Description


The agreement is drafted, usually by a legal professional, incorporating all necessary details and clauses. This can take a few days to a few weeks, depending on the complexity.


Both parties review the agreement. This period can vary but usually takes a few days.


The actual signing of the agreement. It’s a key step and is often done in the presence of a notary. The date of signing is typically agreed upon by both parties and can be scheduled a few days to a few weeks after the final draft is ready.


Following the signing, the agreement must be notarized to be legally binding and for the transfer of ownership to be registered. This is usually done on the same day as the signing.

While physical presence is traditional, remote signing may be possible, especially with technological advancements and legal accommodations. However, notarization would still require a form of official verification.

There’s no universal deadline for signing; it's subject to mutual agreement between the parties.

The contract's validity duration is also determined by the agreement terms. Typically, it remains valid until the property ownership is officially transferred and registered.

After signing and notarization, the agreement must be registered with the local real estate registry. This process involves submitting the notarized contract to the registry, which officially transfers the property ownership.

Any amendments after signing are rare and would typically require agreement from both parties and potentially another round of notarization. It's important to ensure the contract is thorough and accurate before signing to avoid this complexity.

After signing, the process of completing all necessary paperwork and approvals, including registration, can take several weeks to a few months.

This duration depends on various factors like local authority processing times and the specifics of the property.

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How is the payment handled when signing a property purchase contract in Czechia?

In Czechia, understanding the financial aspects of a property purchase agreement is crucial for a smooth transaction.

Here's a breakdown of what you need to know.

When you sign the sales agreement, you may be required to pay a deposit or down payment. This is a sign of your commitment to the purchase.

The typical down payment for a property sale in Czechia can vary, but it's common to see amounts ranging from 10% to 20% of the purchase price.

Apart from the down payment, there might be additional costs such as notary fees, legal fees, and any real estate agent fees. These vary based on the property and the professionals involved.

Payments are often made to an escrow account rather than directly to the seller. This ensures that the funds are secure and properly managed until the transaction is complete.

The due date for the payment is typically specified in the sales agreement. It’s not usually immediate upon signing but set for a later date, often aligned with milestones like completion of a property inspection or finalization of mortgage arrangements.

In Czechia, there are tax implications to consider. The buyer typically pays a property transfer tax, although this can sometimes be negotiated to be paid by the seller. The rate and specifics can depend on the property type and location.

The down payment amount can sometimes be negotiated with the seller. This depends on market conditions, the seller’s circumstances, and the property itself.

The down payment is usually refundable under certain conditions, such as a failed inspection or if the buyer is unable to secure financing. These conditions should be clearly stated in the sales agreement.

Typically, the down payment should come from your personal funds.

However, you might be able to use funds secured from other sources, like a personal loan, but this depends on your financial arrangements and the terms of your mortgage lender.

An attorney or real estate agent can guide you through the payment process, ensuring that all legal requirements are met and funds are transferred correctly. They play a crucial role in managing and facilitating the financial transactions.

You should definitely request a receipt or confirmation of payment when making the down payment. This is important for your financial records and for the integrity of the transaction.

For the seller, there can be capital gains tax implications depending on how long they owned the property and their personal tax situation.

For the buyer, apart from the property transfer tax, there may be future property taxes that vary based on the location and value of the property.

What are the potentials risks and pitfalls?

You might be interested in reading our article about the common risks and pitfalls surrounding a property transaction in Czechia.

In Czechia, the "Kupní smlouva," comes with certain risks and pitfalls that both buyers and sellers should be aware of.

Both the buyer and seller can potentially withdraw from the agreement, but the circumstances under which this is permissible are usually defined within the agreement itself.

There's typically no formal cooling-off period in Czech real estate transactions, unlike in some other jurisdictions. Once the agreement is signed and notarized, it's legally binding.

A valid motive for withdrawal, such as a breach of contract terms by the other party, is generally required.

Buyers can sometimes back out if they are unable to secure financing, but this depends on whether such a contingency is explicitly included in the agreement.

If one party fails to fulfill their obligations, it can lead to legal disputes. The penalties for such a breach are usually specified in the agreement and might include forfeiture of the deposit or financial penalties.

The penalties can vary. For example, if a buyer withdraws without a valid reason, they might lose their deposit. If the seller withdraws, they might have to return the deposit along with an additional penalty.

Real estate transactions in Czechia might differ from those in other countries, especially regarding cooling-off periods, deposit requirements, and legal processes for dispute resolution.

In many countries, there's a defined cooling-off period during which the buyer can back out without penalty, which is not a standard practice in Czechia.

Risks include the discovery of property defects after signing, unforeseen legal issues with the property title, or discrepancies in the property description. It's crucial to conduct thorough due diligence before signing the agreement.

In case of disputes, the first step is usually negotiation between the parties. If this fails, legal proceedings may be necessary. Dispute resolution might involve mediation, arbitration, or court proceedings, depending on the nature of the dispute and the terms of the agreement.

If defects or issues are discovered after signing, the buyer might have legal recourse if these were not disclosed beforehand or if specific warranties were included in the contract.

However, this can be a complex legal matter and might require litigation to resolve.

Disputes can arise over property boundaries, undisclosed defects, or delays in property transfer. These are often resolved through negotiation or mediation, but some cases do end up in court. It's not uncommon for disputes to require legal intervention to reach a resolution.

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.