Surety Agreements and the Sureties Register

A surety agreement is one of the ways of securing a creditor’s claim against a debtor. A surety may be real estate, movable assets or other rights of a property nature. A special regulation applies for rights of lien over property not registered with the land register office (e.g. a cellar), collective assets (e.g. a business), sets of assets (e.g. a collection), movable assets (e.g. a car) which will not be transferred to the creditor on conclusion of a surety agreement.

The surety agreement must be prepared in the form of a notarial deed, in which case the surety shall arise once it is registered by a notary in the sureties register maintained by the Notary Chamber of the Czech Republic.

The notary may also prepare a surety agreement for real estate registered in the land register office. The surety is established once it is registered in the land register.

The sureties register serves not only for the mandatory registration of rights of lien but it is also possible to search through them. A notary can identify whether a certain item is subject to a lien, whereby avoiding the risk of purchasing something which is encumbered by a lien. A creditor may assert their right of lien against a new owner who would find it difficult to claim that they had no knowledge of it. Such care should be taken when purchasing valuable items (e.g. an old car).

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.