Buying property in Czech Republic

21-09-2015

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Initial agreement between the seller and the buyer - Before Contract

What form can this agreement take? Preliminary contract?

The preliminary agreement does not have to be in a written form. 

With whom must the parties (buyer/seller) formalise the initial agreement? Is a legal form imposed? 

There is no legal form imposed. However, it is recommended with regard to legal certainty that preliminary contracts are concluded in written form. Usually, the real estate agent drafts the preliminary agreement.

What are the legal effects of this preliminary contract? Is a preliminary contract necessary?

The preliminary contract is binding for all parties to the agreement. A party who breached the contract is liable for any damages incurred by the other party as a result of the breach. If the actual contract is not concluded, the other party can seek a court decision substituting the declaration of the will of the inactive party.

Even if there is not yet a contract, but the negotiations between the parties arrive at a stage where a contract appears to be highly probable, the party that subsequently refuses to conclude the contract without reason will be held liable for damages that are suffered by the other party.

Are there amounts to be paid, and to whom? Can these amounts be repaid?

There is often a deposit of 3-5 % of the purchase price to be paid to the real estate agent.

Are there any consumer protection measures (cooling-off period, right of withdrawal)?

In general (not only for consumers): If the circumstances of the contract have changed to the extent that it is not reasonable to expect the obligated party to conclude the agreement, the agreement to contract is not binding.

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Notarska komora Ceske republiky

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CZ - 128 00 Praha 2

České republice

Tel.: +420 - 2 - 249 212 58

Tel.: +420 - 2 - 249 211 26

Fax: +420 - 2 - 249 191 92

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www.nkcr.cz

Information for non-EU European countries is available at the following link.