As an exception in this case, it is worth mentioning such a form of ownership as a cooperative. When buying an apartment in a cooperative building, the buyer does not become the owner of this apartment, but one of the members of the cooperative that owns the building in which the apartments are located. The charter of the cooperative may contain a ban on foreigners joining the cooperative; in this case, the apartment can be registered in the name of a legal entity registered in the Czech Republic.
Stages of purchasing real estate in the Czech Republic
Once a suitable property for purchase has been selected, it is customary to verbally agree with the seller to reserve it for several days to obtain an extract from the Cadastral Chamber. It will contain information about the owners of the property being purchased, previous purchase and sale transactions, encumbrances – whether it has been pledged to the bank, and more. If the selected object is “clean”, then the next step is to draw up a preliminary purchase and sale agreement and/or a reservation fee agreement.
The reservation fee usually ranges from 2,000 euros to 5% of the value of the property and is not refundable if the transaction fails at the initiative of the buyer. The reserve agreement specifies the parties involved in the transaction, the property being purchased, the reservation period and the planned date of the transaction.
The buyer will need a preliminary agreement in case of obtaining a mortgage from a Czech bank, or paying in installments. It contains more detailed information about the transaction, the purchased object, as well as the deadline for full payment of its cost.
After signing one or two of the above agreements, the buyer needs to draw up another document – a deposit agreement. The fact is that the process of registering the transfer of ownership rights to a new owner in the Czech Republic takes at least 21 days. All this time, the funds must be in a special deposit account, the custodian of which is either a notary, a bank, or a real estate agency. As soon as the buyer receives documents on the transfer of ownership, the money is transferred to the seller’s account.
After a bank account has been opened in the buyer’s name and a deposit agreement has been signed, the main real estate purchase and sale agreement must be signed. This agreement must be certified by a notary. All documents are prepared in Czech; at the buyer’s request, an official translation into Russian can be issued.
The purchase and sale agreement specifies not only complete information about the parties and the terms of the transaction, but also all agreed upon points, for example, what furniture is left to the buyer, when the seller is obliged to hand over the keys to the sold object, what fines are provided for the parties in the event of force majeure.
When signing the main purchase and sale agreement, the buyer transfers the full amount under the agreement to an open deposit account.
After the parties have signed the agreement and certified by a notary, an application for re-registration of ownership is drawn up, which, together with the main agreement, is submitted to the Cadastral Chamber. In accordance with the law, the object is frozen for 21 days, during which time any actions with it are prohibited. Upon expiration of this period, the chamber begins re-registration. In general, the process takes no more than 45 days.
After registering the property, a stamp is placed on the reverse side of the purchase and sale agreement by the Cadastral Chamber. The buyer can order an extract from the Cadastre, the cost of which is 4 euros, or simply double-check the updated information on the Cadastre website.
At the time of receipt of documents for the property, the funds reserved in the account are transferred to the seller of the property, and commissions are paid to the intermediaries of the transaction.
The transfer of keys can be carried out both on the day of signing the purchase and sale agreement, and on the day of transfer of funds – this is decided by the parties before signing the main agreement.
The last stage of the process of purchasing real estate in the Czech Republic is the transfer of all utility payments to the new owner.
You can find out in detail about the costs when buying real estate in the Czech Republic here.