[BUYING AND SELLING REAL ESTATE IN CZECH REPUBLIC]
109
the company's creditors, not the shareholders. Note: Persons acting on its behalf are liable for the obligations which arise before the company's incorporation in the Commercial Register. If there are more persons acting together, they are liable for such acting jointly and severally. The company can assume the effects of such acts no later than three months from its incorporation and then it is bound by such acts as if it was bound by them from the very beginning.
purchase price. A bank generally insists on being provided with collateral before the loan is drawn. b) Usually, the buyer has to cover a certain portion of the price from their own sources. For large development projects, banks usually require a pledge on all possible claims which the buyer can gain in connection with the real estate. c) In connection with this, the buyer often has to present the seller with an irrevocable acceptance of loan financing by a reputable bank or show proof of sufficient funds before signing the purchase agreement. d) Normally, the mortgage/loan is provided for about 60%, up to 70%, of the purchase price. e) For special transactions such as large individual properties or real estate portfolios, a common alternative to a bank loan is the use of capital market products, for instance, bonds, receivables, or credit derivatives. IX. Payments and Costs a) The costs and taxes are normally borne by the buyer. However, usually the seller has to bear the costs of deletion of old mortgages from the Land Registry. b) Usually, the purchase price is transferred to an escrow account maintained by a notary, a bank or an attorney-at-law, whereafter the money gets transferred to the seller following the successful registration of the transfer in the Land Registry. c) The tax on acquiring property was abolished. No notary or important registration fees are mandatory. The necessary official registration stamp is only
3. Other types of entities There are two other types of Companies under Czech law, a Limited partnership company (k.s.) and an Unlimited partnership company (v.o.s.), these are, however, not often used in real estate transactions. The same applies to private law associations that are not considered to be legal entities and where the liability of the members is unlimited.
VIII.
Financing a) The usual method of financing real estate deals is by way of a bank loan/mortgage for at least a part of the
ILN Real Estate Group – Buying and Selling Real Estate Series
Made with FlippingBook Online newsletter