The preparation of the purchase agreement entails several pitfalls that can jeopardize or at least slow down the entire transfer. In this series on the purchase agreement, we will try to unmask these pitfalls and give guidance on how to avoid them.
The preparation of the purchase agreement entails several pitfalls that can jeopardize or at least slow down the entire transfer. In this series on the purchase agreement, we will try to unmask these pitfalls and give guidance on how to avoid them.
Today we are looking at the issue of specific contractual terms.
An important part of a property purchase agreement is the clause on the handover of the property to the new owner. For example, it may read as follows: “The sellers undertake to hand over the property to the buyer, including all relevant keys, within 10 working days of the submission of the proposal for authorisation of the registration of the ownership right by the competent cadastral office.”
The contract of sale should include an obligation to draw up a handover protocol indicating any defects and the state of the common meters (water, electricity, gas). Defects not indicated in the protocol may be very difficult to claim later.
The contract should also make it clear at what point the obligation to pay for the relevant media passes. This is sometimes stated more generally as follows: The sellers agree to pay all costs associated with the use of the property up to the date of handover and to pay any arrears of charges (including deposits) for the provision of services associated with the use of the property incurred up to the date of handover. The Buyer, in turn, undertakes to reimburse the Sellers for any overpayment of charges (including deposits) for the provision of services connected with the use of the Property incurred up to the date of handover.”
Compliance should be secured by a reasonable contractual penalty for each day of delay in handover. However, beware of exorbitant penalties that do not pay off in the end for either party (see below).
We provide a complete package of legal services related to real estate sales and purchases, including reservation contracts and escrow services. We will also help you with all tax and land registry issues. Our work is fast and accurate, ensuring a worry-free transaction. You’re also welcome to pay after services are provided.
The contract of sale should also specify exactly what is being transferred in addition to ownership of the apartment itself. There have been known cases where the buyer automatically assumed that the seller would leave built-in wardrobes, kitchen units or specific appliances in the flat. An oral agreement is often inconclusive and therefore these facts should also be explicitly stated in the contract, e.g. in the form of a list.
In general, you should also be wary of any contractual penalties. They may be excessive, unbalanced (e.g. only for the buyer’s breach) or insufficient (they do not even cover the seller’s time costs).
All of the above applies to an apartment, a condominium (cooperative share), a house, but also to a limited extent to land.
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We provide a complete package of legal services related to real estate sales and purchases, including reservation contracts and escrow services. We will also help you with all tax and land registry issues. Our work is fast and accurate, ensuring a worry-free transaction. You’re also welcome to pay after services are provided.
Ondřej is the attorney who came up with the idea of providing legal services online. He's been earning his living through legal services for more than 10 years. He especially likes to help clients who may have given up hope in solving their legal issues at work, for example with real estate transfers or copyright licenses.
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