How to properly and safely carry out the transfer of real estate in the Czech Republic

When buying or selling real estate, the correct sequence of individual steps will ensure that all steps will be carried out in the order that´s necessary, there will be no problems and the process will be safe for all parties. There are several procedures. Their choice depends on whether the property is financed by a mortgage and whether the property is subject to a lien of the seller. A total of 4 scenarios can occur:

  1. The purchase of the property is financed by a mortgage and the property isn´t burdened by the seller’s mortgage.
  2. The purchase of the property is financed by a mortgage and the property is burdened by the seller’s mortgage.
  3. The purchase of the property is financed by one´s own finances, without a mortgage, and the property is burdened by the seller’s mortgage.
  4. The purchase of the property is financed by one´s own finances, without a mortgage, and the property isn´t burdened by the seller’s mortgage.

Let’s discuss them in detail now.

1. The purchase of the property is financed by a mortgage and the property isn´t burdened by the seller’s mortgage

Transfer procedure:

A: Signing of a reservation contract with a period of 6 weeks to secure financing
You´ll learn how to write a reservation contract correctly from this recoding of a webinar.

B: Preparatory work
1) elaboration of draft purchase and custodial contracts and their mutual approval by the parties.
2) applying for a mortgage loan, which usually involves:
– proof of income,
– bank estimate of the property to be mortgaged,
– verification of the banking and non-banking register by the bank.
3) approval of the mortgage loan.

C: Signature part of the transfer
1) signing the loan agreement in the bank, arranging insurance for the pledged property and taking over the pledge agreements for co-signing by the seller.
2) signing the purchase contract together with the motion to register the purchase contract at the relevant cadastre, signing the custodial contract and the pledge agreement together with the motion to register the pledge agreement at the relevant cadastre.

D: Transfers of the purchase price and delivery of contracts to the cadastre
1) payment of a part of the purchase price corresponding to the part of one´s own resources for custody.
2) submission of a pledge agreement together with a motion to register the pledge agreement at the relevant cadastre.
3) delivery of the following documentation to the bank for drawing a loan:
– a motion to register the pledge agreement with the seal of the cadastral office proving the submission of the pledge agreement,
– confirmation of the deposition of the part of the purchase price corresponding to the part of one´s own resources, the confirmation will be issued by the custodian (lawyer, bank, notary),
– concluded purchase contract,
– concluded custodial agreement,
– concluded pledge agreement.

4) the bank pays the remaining part of the purchase price corresponding to the mortgage loan in custody.
5) submission of the purchase contract together with a a motion to register the purchase contract at the relevant cadastre.
6) waiting 22-30 days for the registration of the ownership right at the cadastre.
7) release of the purchase price from custody to the account of the seller after the ownership right has been registered at the cadastre.

E: Handing over the real estate
1) handing over the real estate and writing the handover protocol.
2) recording the meter readings (electricity, gas, hot water, cold water and heat).
3) for housing units, notification of the new owner to the Owners Association and facility management together with the status of meters at handover.
4) transfers of energy supplies (electricity and gas) or the Internet or other supplies (for houses – water and waste disposal).

2. The purchase of the property is financed by a mortgage and the property is burdened by the seller’s mortgage

Transfer procedure:

A: Signing of a reservation contract with a period of 6 weeks to secure financing.
You´ll learn how to write a reservation contract correctly from this recoding of a webinar.

B: Preparatory work
1) elaboration of draft purchase and custodial contracts and their mutual approval by the parties.
2) applying for a mortgage loan, which usually involves:
– proof of income,
– bank estimate of the property to be mortgaged,
– verification of the banking and non-banking register by the bank.
3) approval of the mortgage loan.
4) requesting documentation from the seller’s mortgage bank, the following is required:
– quantification of the balance of the loan by the mortgage bank of the seller as of the day when it´s possible for the loan to be repaid. It is approximately 10-15 working days after the expected date of signing the purchase contract,
– the seller’s mortgage bank’s consent to the alienation (transfer) in favour of the buyer,
– the seller’s mortgage bank’s consent to the registration of the pledge of the buyer’s mortgage bank.

C: Signature part of the transfer
1) signing the loan agreement in the bank, arranging insurance for the pledged property and taking over the pledge agreements for co-signing by the seller.
2) signing the purchase contract together with the motion to register the purchase contract at the relevant cadastre, signing the custodial contract and the pledge agreement together with the motion to register the pledge agreement at the relevant cadastre.

D: Transfers of the purchase price and delivery of contracts to the cadastre
1) payment of a part of the purchase price for custody corresponding to the part of one´s own resources.
2) submission of a pledge agreement together with a motion to register the pledge agreement and together with the seller’s mortgage bank’s consent to the registration of the pledge of the buyer’s mortgage bank at the relevant cadastre.
3) delivery of the following documentation to the bank for drawing a loan:
– a motion to register the pledge agreement with the seal of the cadastral office proving the submission of the pledge agreement,
– confirmation of the deposition of the part of the purchase price corresponding to the part of one´s own resources, the confirmation will be issued by the custodian (lawyer, bank, notary),
– concluded purchase contract,
– concluded custodial agreement,
– concluded pledge agreement,
– quantification of the balance of the loan by the mortgage bank of the seller as of the day when it´s possible for the loan to be repaid.
4) the bank pays the remaining part of the purchase price corresponding to the mortgage loan, the part corresponding to the amount of the seller’s loan balance according to the quantification is sent by the bank directly to the seller’s mortgage bank, the remaining part to custody.
5) submission of the purchase contract together with a a motion to register the purchase contract and the seller’s mortgage bank’s consent to the alienation (transfer) in favour of the buyer at the relevant cadastre.
6) waiting 22-30 days for the registration of the ownership right at the cadastre.
7) submission of a motion to enter the satisfaction of mortgage arising from the seller’s mortgage loan to the relevant real estate cadastre.
8) release of the purchase price from custody to the seller’s account after the registration of the ownership right in the cadastre. Here, I recommend making the payment of the part of the purchase price conditional, to be carried out only after the entering of the satisfaction of mortgage or after submitting the motion to enter the satisfaction of mortgage arising from the seller’s mortgage loan.

E: Handing over the real estate
1) handing over the real estate and writing the handover protocol.
2) recording the meter readings (electricity, gas, hot water, cold water and heat).
3) for housing units, notification of the new owner to the Owners Association and facility management together with the status of meters at handover.
4) transfers of energy supplies (electricity and gas) or the Internet or other supplies (for houses – water and waste disposal).

3. The purchase of the property is financed by one´s own finances, without a mortgage, and the property is burdened by the seller’s mortgage

Transfer procedure:

A: Signing of a reservation contract with a period of 4 weeks to prepare transafer
You´ll learn how to write a reservation contract correctly from this recoding of a webinar.

B: Transfer preparation
1) elaboration of draft purchase and custodial contracts and their mutual approval by the parties.
2) requesting documentation from the seller’s mortgage bank, the following is required:
– quantification of the balance of the loan by the mortgage bank of the seller as of the day when it is possible for the loan to be repaid. I recommend approximately 10 working days after the expected date of registration of the ownership right in favour of the buyer.
– the seller’s mortgage bank’s consent to the alienation (transfer) in favour of the buyer

C: Signature part of the transfer
Signing of the purchase contract together with a motion to register the purchase contract at the relevant cadastre and of the custodial contract.

D: Transfers of the purchase price and delivery of contracts to the cadastre
1) payment of the entire purchase price corresponding to custody.
2) submission of the purchase contract together with the motion to register the purchase contract and the consent of the seller´s mortgage bank with the alienation (transfer) in favour of the buyer at the relevant cadastre.
3) waiting 22-30 days for the registration of the ownership right in the cadastre.
4) release of the part of the purchase price corresponding to the balance of the seller’s mortgage loan as per the quantification from custody after the registration of the ownership right in the cadastre has been performed.
5) submission of a motion to enter the satisfaction of mortgage arising from the seller’s mortgage loan at the relevant cadastre.
6) release of the remaining part of the purchase price to the seller from custody. Here, I recommend making the payment of the part of the purchase price conditional, to be carried out only after the complete entering of the satisfaction of mortgage arising from the seller’s mortgage loan.

E: Handing over the real estate
1) handing over the real estate and writing the handover protocol.
2) recording the meter readings (electricity, gas, hot water, cold water and heat).
3) for housing units, notification of the new owner to the Owners Association and facility management together with the status of meters at handover.
4) transfers of energy supplies (electricity and gas) or the Internet or other supplies (for houses – water and waste disposal).

4. The purchase of the property is financed by one´s own finances, without a mortgage, and the property isn´t burdened by the seller’s mortgage

Transfer procedure:

A: Signing of a reservation contract with a period of 4 weeks to prepare transfer
You will learn how to write a reservation contract correctly from this recoding of a webinar.

B: Transfer preparation
Elaboration of draft purchase and custodial contracts and their mutual approval by the parties.

C: Signature part of the transfer
Signing of the purchase contract together with a motion to register the purchase contract at the relevant cadastre and of the custodial contract.

D: Transfers of the purchase price and delivery of contracts to the cadastre
1) payment of the purchase price to custody.
2) submission of the purchase contract together with the motion to register the purchase contract at the relevant cadastre.
3) waiting 22-30 days for the registration of the ownership right at the cadastre.
4) release of the purchase price from custody to the seller´s account after the registration of the ownership right in the cadastre has been performed.

E: Handing over the real estate
1) handing over the real estate and writing the handover protocol.
2) recording the meter readings (electricity, gas, hot water, cold water and heat).
3) for housing units, notification of the new owner to the Owners Association and facility management together with the status of meters at handover.
4) transfers of energy supplies (electricity and gas) or the Internet or other supplies (for houses – water and waste disposal).