Notary Escrow

Should you want to buy or sell real estate a notary, in addition to drafting the purchase agreement, can hold the purchase price in escrow and thereby ensure a safe method of payment.

In any European country with an advanced legal system it is inconceivable to settle the purchase price other than in a form of an escrow. The advantages of an escrow provided by a notary are obvious – the seller eliminates the risk that they will not be paid the entire purchase price and the buyer does not risk handing over the purchase price prior to the property right being registered at the land registry office. Furthermore, the buyer can ensure that the seller fulfills their legal obligation to pay the real estate transfer tax. A notary is considered as a sufficiently trustworthy escrow agent due to their legal and registration obligations which are inspected by self-governing notary authorities. In addition, notaries are insured against any possible risk.

The drafting of a purchase agreement and the administration of an escrow account are so closely related that it is preferable to have them administered by a single person – the notary.

In the Czech Republic, notaries perform a notarial activity, provide legal assistance, perform property administration, and perform other activities for which they are entitled compensation the amount of which, as well as the manner in which it is established, is governed by the provisions of the Decree No. 196/2001 Coll., as amended. The amount of notary's remuneration shall be determined in accordance with the compensation rate per act or total of acts concerning the notary's activity determined by a fixed amount or as a percentage of a tariff rate, whereas the value of the subject of the act serves as the tariff value (e.g. the usual price of a thing, the price of transferred property, the amount of a claim, etc.). Due to a complex calculation of the compensation for the notary's activity, the potential applicants / clients are recommended to address their possible inquiries directly to the notary having the sufficient knowledge of the relevant language.

Essentials of a purchase agreement (Real Estate Transfers)
Escrow fee (notary tariff)