Contracts for buying Czech property
When you buy a property in the Czech Republic, you will sign several contracts with the estate agency or seller. These will include a reservation agreement, the precontract and the deposit agreement. It is vital to seek legal advice before signing any documents when purchasing real estate.
The first step is signing a reservation agreement which establishes the obligation of the seller not to sell the apartment to another person within a certain period of time and the obligation of the buyer to pay the fee for the reservation. At this point it is very important to the buyer to focus on what is going to happen with the reservation fee in case if the contract is not successfully executed.
The reservation agreement might include an obligation to conclude the contract of sale. You should understand that under this agreement you would not be able to legally terminate the contract of sale. This agreement must correctly and precisely define the real estate and the purchase price.
If you are going to finance the purchase of the property by using a mortgage, you should consider the procedure to be followed in case the bank does not approve you for credit. The resolution of such problem should be included in the reservation agreement.
Then the precontract is concluded, which is the agreement that the contracting parties want to conclude a contract of sale what is to be sold and under what conditions. Under the Civil Code in the Czech Republic, if the contracting party does not comply with the obligation to conclude the contract, the authorized party may request that the contents of the future contract be indicated by the court or the person defined in the contract.
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