Buying property

Purchase price escrow (úschova kupní ceny)

In Czech: Úschova kupní ceny

Purchase price escrow (úschova kupní ceny) means the buyer deposits the money for a property with a lawyer, notary or bank, who pays it to the seller only when agreed conditions are met, usually once the buyer is in the land register.

Also called: escrow account, lawyer escrow, notary escrow, úschova

What it means

Purchase price escrow (úschova kupní ceny) solves the basic problem of a property sale: the buyer does not want to pay before becoming the owner, and the seller does not want to transfer ownership before being sure of payment. The money is therefore held by a third party who pays it out according to written instructions agreed in advance.

There are three common kinds: escrow with a lawyer (advokátní úschova), with a notary (notářská úschova) and with a bank (bankovní úschova). They differ in cost, speed and who is responsible for paying out correctly, but the principle is the same.

How it works in the Czech Republic

Lawyer escrow is governed by § 56a of the Advocacy Act and Resolution No. 7/2004 of the Czech Bar Association (Česká advokátní komora): the escrow contract is in writing, the money sits on an escrow account at a bank, and the lawyer reports the escrow to the electronic escrow register (elektronická kniha úschov). Notary escrow of money is governed by the Notarial Code from § 86; money is deposited on the basis of a request with prescribed contents.

The escrow contract states who deposits how much and when, under what conditions the money goes to the seller and when it returns to the buyer. A typical release condition is a land register extract showing the buyer as owner and no mortgages that should not be there. Often the seller's mortgage is paid off from escrow first so the bank can have its lien deleted.

If the buyer uses a mortgage, the steps are coordinated with the bank, which releases the loan under its own conditions, into escrow or directly to the seller.

Practical example

For example, the parties sign a purchase agreement for a flat at CZK 3,800,000 (an illustrative figure) and an escrow contract with a lawyer. The buyer transfers the money to the escrow account, the lawyer files the application for entry, and after the buyer is registered the lawyer pays CZK 1,200,000 to the seller's bank to clear the mortgage and the rest to the seller. If the entry were rejected, the money would go back to the buyer.

What to watch out for

  • Do not pay the price or a large advance in cash; the law restricts cash payments above a certain amount, so check the current limit.
  • Check that the lawyer or notary is genuinely practising and that the account is held in their name as an escrow account.
  • The escrow contract must set clear conditions and deadlines for release and refund, including what happens if the entry is rejected.
  • Never send money to an account number from an unexpected email; confirm it by phone directly with the lawyer or notary.

Frequently asked questions

Is lawyer, notary or bank escrow better?

The principle is the same; they differ in price, speed and payout rules. What matters is that the escrow conditions fit your purchase exactly.

When does the seller receive the money?

When the conditions of the escrow contract are met, usually once the buyer is entered as owner in the land register.

Why not pay the seller directly?

You become the owner only on entry into the land register. Escrow protects both sides in the period between signing and registration.

  • Purchase agreement (kupní smlouva)A purchase agreement (kupní smlouva) is the written contract in which the seller undertakes to transfer ownership of a property to the buyer and the buyer undertakes to pay the price. Ownership passes only on entry into the land register.
  • Entry into the land register (vklad do katastru)Entry into the land register (vklad do katastru nemovitostí) is the registration of ownership or another property right in the land register based on a contract. Only this entry makes the buyer the owner, with effect from the day of filing.
  • Plomba in the land register (plomba v katastru)A plomba in the land register is the informal name for a note that proceedings affecting the registered rights are under way, typically an entry after a sale. The law calls it marking that the rights are affected by a change.
  • Lien (zástavní právo)A lien (zástavní právo) secures a debt: if the debtor does not pay, the creditor can be satisfied from the pledged property. On a property in the land register it arises by entry and stays with the property when it changes hands.
  • Mortgage (hypotéka)A mortgage (hypotéka) is a long-term housing loan secured by a lien on a property. The borrower repays it in regular monthly instalments, usually over many years.

Sources

Laws and official pages this text is based on (in Czech).

This text is for information only and has not yet been checked by a legal or financial expert. It is not legal, tax or financial advice. Verify important details in the listed sources or with a professional.

Updated 25 October 2026

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