[BUYING AND SELLING REAL ESTATE IN CZECH REPUBLIC]
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seller and handed over to the purchaser, it is thus recommended to include it in the purchase agreement as an annex thereto. Note: The parties may choose to include several collateral provisions in the purchase agreement, which may be constituted as rights in rem and registered in the Land Registry. Such collateral provisions may facilitate the negotiation of the sale of property by ensuring both parties’ specific requirements are satisfied. The parties may choose to include the following collateral provisions in the purchase agreement: (i) reservation of ownership right, (ii) reservation of repurchase, (iii) reservation of resale, (iv) pre-emption right, (v) purchase testing or (vi) reservation of a better buyer. A detailed description of these stipulations exceeds the scope of this article, however, their inclusion in the purchase contract may prove very practical in individual cases. We will gladly provide more detailed information upon request. III. Conclusion of the Purchase Agreement a) The purchase agreement has to be concluded in writing and the signatures of both parties must be on one document. As the Land Registry office investigates the authenticity of the parties’ signatures on the purchase agreement, it is advisable that the parties officially certify their signatures. For the purpose of the registration in the Land Registry (i.e., for the filing of the application for the permission to enter a record into the Land Registry), it is not required that the parties to the contract prove their identities by their officially certified signatures.
IV. Transfer of Ownership a) The parties are advised to stipulate in the purchase agreement which party is to apply for the registration in the Land Registry. In most cases, it is stated that the seller has to apply for the registration in the Land Registry within a certain period of time from the conclusion of the purchase agreement. To ensure that the purchase price is paid to the seller after the registration of the ownership of the property in favor of the buyer, the parties usually escrow the purchase price at a notary, attorney-at-law or bank. The parties to the contract thus usually also conclude an escrow agreement with the bank, notary or attorney-at-law, along with the purchase agreement. Under run-of- the-mill escrow agreements, the bank/notary/attorney-at-law is obliged to transfer the purchase price after the fulfilment of the conditions stated in the escrow agreement, which typically is only the registration of the buyer in the Land Registry as the owner of the transferred property. V. Agents a) The Buyer or Seller may employ the services of a real estate broker. The contract with the broker is most often concluded as an exclusive agreement. b) The real estate broker's commission is generally determined by the market situation and is usually between 3 and 5 % of the purchase price. VI. Forms of Ownership a) In general, all individuals and legal entities can invest into and own real estate assets. b) It is irrelevant if the owners and
ILN Real Estate Group – Buying and Selling Real Estate Series
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