Prior to signing real estate purchase agreement in Czech Republic, make sure you fulfill all necessary legal requirements. The real estate purchase agreement must be in writing with notarized signatures. Be sure to place the signatures on the same page of the contract. It is crucial to include all the negotiated terms in the real estate sale contract. Failing to do so could weaken your position and/or invalid the contract. This is necessary to ensure that both parties can rely on clearly defined obligations that are fulfilled in accordance with the contract.
Basic terms of the real estate purchase agreement
Is is mandatory to incorporate the contract’s essential elements as required by law into the written purchase agreement. If these essential elements are not included (or specified through all legal requirement), the contract may be invalid or nonexistent.
The essential elements of a real estate purchase agreement include:
- Identification of the contracting parties
- The subject matter of the contract
- Property identification
- Purchase price
- Written form of the contract with notarized signatures
Terms of real estate agreement
Contracting parties
In the introductory section of the real estate purchase agreement, the contracting parties must be properly identified, including their full name, personal identification number (if applicable), residence, and delivery address. It must be clear which party is the seller and which is the buyer. The agreement must clearly indicate that the seller is transferring ownership rights for compensation and that the buyer agrees to pay the purchase price and acquire ownership of the property according to the terms of the purchase agreement.
Subject matter / purpose of the contract
A crucial element of the purchase agreement is the definition of the subject matter. The purpose of a real estate purchase agreement is the transfer of ownership from the seller to the buyer for payment. Sellers agree to hand over the property to the buyer and enable them to acquire ownership rights, while the buyer agrees to take possession of the property and pay the purchase price. The property must be clearly identified in the contract, and the payment method must be specified as money. If the contract stipulates compensation in the form of another item instead of money, the agreement would be classified as a barter contract.
Real estate identifiaction
The property being transferred must be identified in a way that prevents any confusion with another property. The rules for property identification are quite strict; failure to comply with these rules will result in the Land Registry not recording the transfer of ownership rights. You can obtain the necessary information for identifying the property from the Land Registry.
Purchase price
The purchase price of the property, typically along with the payment terms (i.e., method and date of payment), is a critical part of the purchase agreement. The contract must clearly state that the property is being transferred for compensation, which must be in the form of money. If the agreement specifies compensation in the form of another item instead of money, it would be considered a barter agreement. The exact purchase price does not have to be specified in the contract. If the purchase price is not precisely stated, the law provides a default rule that the property is transferred for its usual price. However, due to tax obligations, it is in the interest of both parties to specify the purchase price in the contract accurately.
Important Note: It is recommended to clearly specify not only the amount of the purchase price but also the conditions of its payment, especially if it is to be paid in several installments.
Signature and dates
For the purchase agreement to be valid, the signatures of the contracting parties must be notarized. The signatures must be placed on the same page of the contract.
In addition to these essential elements, you can also include supplementary provisions in the contract, such as:
- Agreement on the method of payment of the purchase price
- Method and date of property transfer
- Possibility of contract termination or contractual penalties in case of breach of contract by either party
Procedures after signing the agreement
To acquire ownership of the property, a change must be recorded in the Land Registry. The change of ownership will be completed at the conclusion of the registration process before the cadastral office. An interesting topic is the process of handling complaints about property defects. This involves the exercise of rights regarding defects if the transferred property does not meet the terms of the real estate purchase agreement. Contractual agreements often take precedence over the law. Therefore, we again emphasize the importance of the terms recorded in the contract.
Conclusion
Protect your rights at every stage of the property transfer process. Do not underestimate the selection of buyers and the formulation of individual contractual terms.
Not sure how to proceed correctly with the property transfer? Don’t hesitate to contact us (Facebook, LinkedIn či Instagram).
