The preparation of the purchase agreement entails several pitfalls that can jeopardize or at least slow down the entire transfer. In our article, we will try to unmask these pitfalls and focus on how to write a real estate purchase contract so that nothing will hold us back.
What do the contract and its terms and conditions actually entail?
Every valid real estate purchase contract must contain at least two parties who have agreed to certain terms and conditions and have signed the contract as a result. For the purposes of registration in the Land Registry, it is necessary to clearly specify the seller and the buyer. It is important that the identification details of both parties are given, preferably taken from their identity cards.
What must be stated? Record the name, surname, birth number, permanent home address and, where applicable, the delivery address of the seller, as well as the name, surname, birth number, permanent home address and, where applicable, the delivery address of the buyer.
Just as it is necessary to describe the parties entering into the contract in detail in the contract of sale, it is also important to precisely define the object of purchase, i.e. the property to be transferred. It is not enough to simply state the address where the property is located, but above all the data from the Land Registry, such as the plot number, the area of the land, house, apartment or other property, the number of the housing unit and other specifications that clearly define the property.
An important part of the property purchase agreement is the clause on the transfer 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, on a protocol within 10 working days of the submission of the proposal to authorise the registration of the title by the competent cadastral office.”
The contract of sale should include an obligation to draw up a handover report 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.
It should also be clear from the contract 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 ultimately do not pay off 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.
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The contract of sale should also specify exactly what is being transferred in addition to the ownership of the apartment itself. There are known cases where the buyer has automatically assumed that the seller will 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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