Here are some factors as published by CEREAN (Central European Real Estate Associations Network) in their Czech Republic section:

Czech Republic property purchase is not without risk.

‘The Czech legal code gives preference to the real owner of a property instead of that which is written into the public records (in the cadastre of real estate). An extract from the cadastre of real estate does not always reliably reflect the ownership rights to real estate. It can happen that a seller can bring forth documentation of ownership of a lot or piece of land from the cadastre of real estate, an investor buys the land, and the cadastral office registers him as the owner. A few years later, though, legal proceedings are begun to determine the actual ownership of the land, and a court decides that the owner of the land is someone else.’

‘An extract from the cadastre of real estate is not, therefore, sufficient documentation for closing a contract. The results of privatization and restitution of real estate do not always correspond to the actual, factual state of affairs. When buying real estate in the Czech Republic, it is of the utmost importance to thoroughly go through all available documentation on the basis of which the ownership rights have been granted to the seller, or as the case may be to any of his family members, either living or deceased. This requires adequate knowledge of local conditions and the legal directives in individual time periods in which the evaluated documentation came about. The goal of this investigative process is to find out whether there was ever an ownership dispute or conflict in the past that could in the future threaten the rights of the investor.’

‘Strict rules and regulations are valid for transfer of real estate in the Czech Republic. A purchase contract can be declared invalid for slight errors in how the real estate is named or described, or because certain less than specific wording is used. It is not enough for the cadastral office to agree to register the ownership rights to the cadastre. There have been and continue to be cases when the formal validity of a contract is disputed years after the cadastre office has agreed to an investment or transfer. The actual contract itself, then, by Czech law, is rendered less important. Simple, mechanical inspection of foreign contracts can act to rob an investor of his money and his real estate.’

‘During the Communist era, in 1951, there occurred on the territory of what is now the Czech Republic the denial of traditional principles known as ‘superficies solo cedit’, which up to that time had been valid. This legal principle made it impossible for one person to own a building on land which belonged to another person. Essentially, what the new legal ruling did was make it legal for one person to own a building on another person’s land. This rather inconvenient amendment to ownership law has remained on the books until today.’

‘A general problem in the Czech Republic is the slow rate of court proceedings. Like a number of other countries, the Czech Republic has been sanctioned for its slow pace of court proceedings. The European Court of Human Rights has ruled that the country must pay compensation in a court case on the settlement of a real estate dispute in the common name of a married couple. The court case was stuck in the court system for more than 10 years. ‘

Nathan Brown www.czechpoint101.com