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What to look out for when concluding a land purchase contract?

When you are buying land, you need to focus on slightly different things than when buying a house or apartment. Of course, it depends on the purpose of such a purchase. We will approach the purchase of a forest differently, and the purchase of a building plot for the purpose of building a house differently.

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Check land prices

Have you looked at a plot of land, do you like the location, size and accessibility, only the price seems prohibitive? Then start by checking and comparing the price with other plots of similar parameters.

Land prices are starting to fall slightly in the second half of 2023. However, the trend is different in different parts of the country. For example, in Prague, although the price of land sold is slowly decreasing, at the same time the price per square metre is either stagnating or even increasing. However, this is not a contradiction in terms. The reason is that the size of the plots sold is shrinking, or rather that there is more interest in smaller ones. In other parts of our country, however, both the price per plot sold and the price per square metre are currently falling. The current price of land is on average CZK 3.3 thousand per square metre in Prague and Brno and approximately CZK 2.3 thousand per square metre outside these large cities. We are talking here about the prices of building plots, which are the most in demand. However, apart from the location, the biggest influence on the price of land is the way it is used.

Real Estate Purchase or Sale

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.

Tip: Have you bought the land you plan to build on? The key is to check whether the land is designated for building. And if it is not, because it falls within the agricultural fund, you will first have to be removed from the fund. In our separate article, we’ll tell you how to do this.

The price level of a building plot is of course also influenced by the availability of infrastructure, accessibility, road or train connections, proximity to major cities and the availability of shops, offices and cultural activities.

If you are not sure about the price of the offered land, compare it with the prices of land of similar parameters. However, you must take into account all the parameters mentioned above and especially the type of land use.

In the case of agricultural land , the five-digit BPEJ code indicates the suitability (and therefore the price) of the land. This provides information on the climatic regions (first digit), the main soil units (second and third), the slope and exposure (fourth) and the depth of the soil profile and the content of the soil skeleton (fifth). Many other characteristics can be derived from these values and the practitioner can extract a great deal of information from them to determine the value of the soil. You can find out the BPEJ code from the land registry. The price of land according to the BPEJ code varies depending on the cadastral area and is dealt with by some web applications.

If, on the other hand, you want to sell the land and you don’t know how to set the price, you can take advantage of a number of free online pricing offers. There are also various land suitability calculators, charts and land price lists. But count on the fact that very often nothing is really free, i.e. it is usually an offer from an estate agent who will then offer to sell your land. Consider whether the services offered really match their prices or whether you can manage everything on your own or with the help of other professionals.

Tip: Selling an apartment or house is not easy. At least that’s what we hear from real estate brokers who cannot recommend self-selling for perfectly logical reasons. But is it really so hard that you can’t handle it yourself? Whether your motivation for starting to sell without the help of a real estate agent is the desire to avoid paying commission, or you simply don’t trust brokers, we’ll tell you how to proceed, what to look out for and when it’s better to seek the help of a professional.

Study the zoning plan carefully

If you are buying or selling land to build on it, the key is to buy a building plot for that purpose. However, we recommend that you also study other plans with the surrounding area. There may be a busy road in the pipeline, the construction of a commercial complex, or something else that will adversely affect the status and value of the land in question. And not just to the value of the land, but directly to your life.

Don’t limit your research to the municipal plan, but focus on the county plan as well. In the municipal plan you should of course be interested in the land use of the land and for building land then the degree of buildability. If you are not an expert on the subject, it is a good idea to consult an expert beforehand. In the zoning plan you will also find various signs and codes that may indicate that construction is not possible. Subsequently, it is advisable to check whether the municipality’s zoning plan is in line with the county’s, so that, for example, the county does not have other plans for the land. Theoretically, you should be able to find this out from the municipality’s zoning plan, but our experience as an attorney shows that there are sometimes exceptions that prove the rule.

Check the land records: a fence does not always have to follow the property line

Always start from the situation recorded in the Land Registry. However, compare it with reality. Fences or walls between plots can lead the wrong way. You could end up discovering that you only bought the part of the land that the seller had fenced off and the rest belongs to someone else, such as the city.

The owner of the land that was wrongfully taken may then demand payment of unjust enrichment (you were wrongfully using their land) or demolition of the fence and return of the land. Restitution in this sense means letting them use the land, simply building the fence elsewhere and thus reducing the size of your own land.

However, once the land purchase agreement has been concluded, it will be too late to chase the bull. Everything needs to be taken care of while the seller is interested in agreeing with you

From law practice: There were too many easements on the land

Mr Štefan looked for a plot of land outside Prague. He wanted to build a Canadian log cabin on it. To make sure that everything would go smoothly and without complications, he ordered a review of the land purchase contract from us.

According to the zoning plan, the land was indeed a suitable refuge for such a development. However, we discovered several obstacles in the land registry. There were more easements on the land than usual. These were both the classic water and gas utility easements, but several neighbors also had easements registered. They had the right of passage over the land and even the right to let their flock of sheep pass.

In legal parlance, we would describe this as a situation that would be incompatible with peaceful neighbourly life. Plain and simple, Mr. Stephen would not have much peace there. Thanks to our warning, he eventually backed out of his plan in time and chose a more suitable plot of land, not far from the original one.

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Real Estate Purchase or Sale

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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Author of the article

JUDr. Ondřej Preuss, Ph.D.

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.

Education
  • Law, Ph.D, Pf UK in Prague
  • Law, L’université Nancy-II, Nancy
  • Law, Master’s degree (Mgr.), Pf UK in Prague
  • International Territorial Studies (Bc.), FSV UK in Prague

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