Buying property
Agreement on a future purchase agreement (smlouva o smlouvě budoucí kupní)
In Czech: Smlouva o smlouvě budoucí kupní
An agreement on a future purchase agreement (smlouva o smlouvě budoucí kupní) obliges the parties to sign a purchase agreement later on terms agreed now. It is used when a sale cannot be completed yet, for example for a flat under construction.
Also called: future purchase agreement, preliminary purchase agreement, SOSB, smlouva o smlouvě budoucí
What it means
An agreement on a future purchase agreement (smlouva o smlouvě budoucí kupní, often shortened to SOSB) does not transfer ownership. It creates a duty for one or both parties to sign the actual purchase agreement later, and it already contains the key terms of that future contract, above all the property and the price.
It is useful when a purchase cannot be completed yet: a new-build flat is not yet registered as a unit in the land register, the buyer is waiting for mortgage approval, or the seller first has to clear a mortgage or finish an inheritance. The parties lock in the terms in advance.
How it works in the Czech Republic
Under the Czech Civil Code, a party undertakes to sign the future contract when called upon within the agreed period, or within one year if no period is agreed (§ 1785). If the entitled party does not make the call in time, the duty to sign the future contract lapses (§ 1788).
Developers use this agreement often: the buyer signs it, pays advances as construction progresses, and signs the purchase agreement after the building is approved for use (kolaudace) and the units are entered in the land register. For resale flats it can be used, for example, when the bank wants to see a binding commitment before releasing the mortgage.
In practice it is made in writing and should state the future price, a description of the property, the date or condition for signing the purchase agreement, the amount of any advance and how it is protected, and penalties if one side refuses to sign.
Practical example
For example, a buyer chooses a 3+kk flat in a building under construction for CZK 7,500,000 (an illustrative figure). They sign a smlouva o smlouvě budoucí kupní and pay an advance, and the contract says the developer will call on them to sign the purchase agreement within three months of the occupancy approval. If the developer misses the deadline set in the contract, the buyer may withdraw and get the advance back.
What to watch out for
- Check who owns the land and whether the title deed shows mortgages, such as the developer's bank loan.
- Ask how your advances are protected, ideally through escrow or a blocked account rather than a direct payment to the developer.
- Watch the deadline for calling on the other party; if nobody uses it, the duty to sign lapses.
- Ask for a draft of the future purchase agreement, or at least its key terms, to be attached.
- Check when the price, floor area or fit-out standard may change.
Frequently asked questions
By when must the purchase agreement be signed?
Within the agreed period. If the contract sets none, the law counts with one year, and without a timely call the duty lapses.
Am I the owner after signing a future purchase agreement?
No. You become the owner only after the purchase agreement is signed and entered in the land register.
What if the seller refuses to sign the purchase agreement?
The agreement creates a duty to sign, but how to enforce it in your case is a question for a lawyer.
Sources
Laws and official pages this text is based on (in Czech).
- Občanský zákoník - Smlouva o smlouvě budoucí (§ 1785-1788) - podnikatel.cz (Internet Info)