WHEN IS THE PURCHASE OF A FLAT OR A NON-RESIDENTIAL UNIT POSSIBLE ?
In one of our previous articles concerning the purchase of real properties in the Czech Republic we have
mentioned the importance of records in the Cadastral Register. As you may already know the Cadastral Register
is a general database in which most real estates in the Czech Republic and also some related rights and obligations
are registered. Generally the following kinds of real properties are registered in the Cadastral Register:
- lands in the form of land parcels
- buildings connected with the land by a fixed bottom
- flats and non-residential units in the form of separate units
It is possible to register the buildings and units in the Cadastral Register when they are still under construction, i.e. before they are completed. Generally it is also visible from the Cadastral Register whether the real property in question was completed or not. The completion of the real property should always be evidenced by a corresponding effective decision of a building office approving the usage of the real property for a given purpose. On the other hand, once the real property was registered as a completed one, this registration is hardly ever changed although the property might be under reconstruction.
Whenever you are interested in a flat or a non-residential unit you should make sure that they are registered in the Cadastral Register as separate units. Actually you can find many flats being occupied by people which are not registered in the Cadastral Register. In such cases only the whole building in which such flats are situated has been registered in the Cadastral Register. This is very important since no unit which is not registered as a separate one in the Cadastral Register can be sold or purchased. Until the unit is registered as a separate one in the Cadastral Register it does not exist from legal point of view and can not be an object of transfer.
There are several possibilities how to determine separate units in the building. The most common one is by a document issued by the owner of the building in which the units are going to be determined. Such document is called a “building owner´s declaration” and requires registration in the Cadastral Register to be effective. The Law No. 72/1994 Coll., on ownership of flats, as amended, stipulates all inherent parts hereto and namely the following must be included:
- description of the building in which the units are situated
- description of the land plot/land pots under the building
- determination of all units, all their parts and accessories, their equipment
- determination of common parts of the building which will be used by all owners of units in the building
- co-owner shares on common parts of the building and on the land plot/land plots under the building related to the ownership of each unit
- rights and obligations related to the building which will pass on the new owner of the unit
- rules governing the administration of the building and settlement of related costs
Once the building owner´s declaration is filed with relevant Cadastral Office it is possible to file a purchase contract concerning transfer of ownership title to any of the units determined by the building owner´s declaration. This situation occurs namely in cases when old buildings already registered in the Cadastral Register are being reconstructed and new flats determined in them.
We would recommend taking the above mentioned into account whenever you consider a purchase of a particular flat namely for the following reasons:
- until the flat or a non-residential unit are registered as a separate ones in the Cadastral Register or corresponding petition is filed at least it is not possible to purchase it
- even in case the building owner´s declaration was executed and filed with relevant Cadastral Office it represents a risk until it is successfully registered in the Cadastral Register
- in case you need a mortgage credit to pay up the agreed purchase price for the property your bank might consider the fact, that the property has not been registered in the Cadastral Register yet, a risk, too
We believe that the information mentioned in this article will help you avoid possible inconveniences in connection with finding and purchase of a particular flat you might be interested in. In case you choose a flat which has not been registered in the Cadastral Register yet you should expect longer, a bit more complicated and risky procedure. Probably also related expenditures will be higher.
Since it is not possible to prepare a general guidance fully applicable in each case we would like to offer you our help concerning the acquisition of any real property in the Czech Republic. Should you wish so it will be a pleasure for us to start a closer cooperation with you.