Phases and characteristics of purchasing commercial real estate in the Czech Republic
The Czech Republic is considered one of those countries where it is difficult to get round the regulation of the law or bribe. Therefore, one should be aware of all the phases of purchasing commercial real estate in the Czech Republic.
Phase 1: Reservation of the object and making a deposit
Checking the property
An oral reservation is generally allowed to last no more than two weeks (frequently just several days). During this period of time, the buyer and his realtor check the legal status of the acquired commercial property in the Czech Republic.
A conclusion of a deposit agreement
The agreement on the object reservation (the contract of deposit), as well as all subsequent, is in the Czech language. In case the entrepreneur does not know the language, the agent explains the clauses of the contract to him or provides translated draft of the contract.
This document specifies:
- for what period the object is reserved,
- what deposit is paid,
- fines for non-compliance with the agreements.
Opening of a personal bank account in the Czech Republic
It is indispensable to remember that the law does not oblige you to open bank accounts in the Czech Republic. The money can be transferred right from your country. However, the account may come in useful later, for instance, for paying municipal services or obtaining rental payments.
Phase 2: Conclusion of the contract of sale
Open a deposit account
One should admit that the keeper of the deposit can be a bank, a real estate agency, a notary or a lawyer. The deposit agreement is signed by the buyer, the seller and the person, who takes custody of the funds. After the conclusion of this contract, the buyer transfers money to the deposit account.
The signing of the contract of sale
It is the main document. The proprietary is transferred on its basis. The contract of sale consists of:
- the cost of the object,
- information about the previous and the new owner,
- deadline for transferring money,
- the most appropriate way of transferring money (attorney or notary deposit account),
- deadline for the transfer of property,
- the procedure of how the money would be refunded in case the transaction did not take place.
The entrepreneur must transfer the full value of the commercial real estate he is purchasing to the deposit account.
Phase 3: Payment of the transaction
Real estate is commonly paid in Czech crowns. Bank transfer is the only satisfactory way of payment in Czech Republic.
Phase 4: Registration of a new owner
After the conclusion of the main contract of sale, the agent applies for the re-registration of proprietary.
