Quick Overview
What to Watch Out for When Buying Land
- Land Registry: Verify the owner, easements, liens, restrictions on disposal, and any seals.
- Zoning Plan: For building lots, determine whether and under what conditions you are actually permitted to build on the property.
- Boundaries and Access: Compare the land registry records with the actual conditions on the ground and verify that you have legally guaranteed access to the property.
- Purchase Agreement: The land must be correctly identified, and the agreement should clearly specify the price, payment terms, transfer of possession, and the procedure for registration in the Land Registry.
- Transfer of Ownership: Simply signing the purchase agreement does not make the buyer the owner of the land; ownership of real estate registered in the land registry is acquired upon entry into the public registry.
Are you buying land and don’t want to find out after signing that third-party rights encumber it or that the contract doesn’t adequately protect your money? We’ll review the purchase agreement and the legal status of the land before you sign and alert you to risks that may not be immediately apparent from the documents.
What should a land purchase agreement include?
A land purchase agreement must be in writing. The Civil Code requires this for the transfer of a real right to real property, and the declarations of the contracting parties in such a transfer must be recorded in the same document.
Above all, the contract must correctly identify the seller and the buyer and unambiguously specify the land being transferred. For registration in the land registry, the land is identified primarily by its parcel number and the name of the cadastral area; in some cases, it is also necessary to distinguish the building parcel.
In practice, we recommend that the contract also specify in detail:
- the purchase price and the method of payment,
- the use of escrow services provided by an attorney, notary, or bank, if applicable,
- the seller’s declaration regarding legal and factual defects in the land,
- the procedure for filing an application for registration in the land registry,
- the transfer of the property and related documents,
- the procedure to follow if the land registry does not approve the registration of ownership.
Simply signing the contract does not make the buyer the owner of the property. For real estate registered in the land registry, ownership is acquired only upon entry into the public registry.
Check Land Prices
Have you found a plot of land where the location, size, and accessibility suit you, but the price seems unreasonably high? Start by checking and comparing the price with other plots of similar characteristics.
Prices for building lots vary significantly not only between individual regions but often even between neighboring municipalities. It’s not just the price per square meter that matters. The value is primarily influenced by the potential future use of the land, its size and shape, the availability of utilities, legally guaranteed access, transportation accessibility, and restrictions resulting from zoning regulations. When comparing offers, therefore, always compare lots with similar characteristics and the same intended use.
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Real Estate Purchase or Sale
We provide comprehensive legal services related to the purchase or sale of real estate, including reservation agreements and escrow services. We can also assist with land registry and tax matters. We can handle everything within 48 hours, even when purchasing from a developer.
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Tip for article
Tip: Have you purchased a plot of land on which you plan to build? The first step is to verify whether the land is zoned for construction. And if it isn’t, because it’s part of the agricultural land reserve, you’ll first need to have it removed from the reserve. In our separate article, we’ll advise you on how to do that.
How do you determine the price of a plot of land?
If you’re unsure about the price of the land being offered, compare it with the prices of plots with similar characteristics. However, you must take all the mentioned characteristics into account, especially the intended use of the land.
For agricultural land, the soil’s productivity (and, consequently, its price) is indicated by a five-digit BPEJ code. This code provides information on climatic regions (first digit), major soil units (second and third digits), slope and aspect (fourth digit), and soil profile depth and skeletal content (fifth digit). Many other characteristics can be derived from these values, and an expert can glean a great deal of information from them to determine the value of the land. You can find the BPEJ code in the real estate cadastre.
The price of land based on the BPEJ code varies depending on the cadastral area and is calculated by certain web applications. In the contract, it is important to identify the transferred land exactly according to the land registry data, particularly the parcel number and the name of the cadastral area. If parcels in a given cadastral area are listed in two numerical series, the fact that a parcel is designated for construction must also be specified for a building parcel.
Conversely, if you want to sell a plot of land and are unsure how to set the price, you can take advantage of a number of free online valuation services. There are also various soil fertility calculators, charts, and land price lists that can help you set the price. Keep in mind, however, that very often nothing is truly free—in other words, these are usually offers from real estate agencies that will then try to sell your land for you. Consider whether the services offered are truly worth their price, or whether you can handle everything on your own or with the help of other experts.
Tip for article
Tip: Selling an apartment or a house isn’t easy. At least that’s what we hear from real estate agents, who—for perfectly logical reasons—can’t recommend selling on your own. But is it really so difficult that you can’t handle it yourself? Whether your motivation for selling without a real estate agency is a desire to avoid paying a commission or simply a lack of trust in agents, we’ll tell you how to proceed, what to watch out for, and when it’s better to seek professional help.
Carefully review the zoning plan
If you are buying or selling land with the intention of building on it, the key is to purchase a lot designated for that purpose. However, we also recommend reviewing other development plans for the surrounding area. A busy road, a shopping center, or some other project may be in the works that could negatively impact the status and value of the land in question. And not just the value of the land, but your life as well. Therefore, a land purchase agreement should only be signed after a thorough analysis of the zoning plan and all restrictions.
Do not limit your research to the municipal zoning plan alone; be sure to review the regional zoning plan as well. In the municipal zoning plan, you should naturally focus on the land’s designated use and, in the case of building lots, the degree of buildability. If you are not an expert on this subject, it is a good idea to consult with a specialist in advance. The zoning plan also contains various symbols and codes that may indicate that construction is not permitted.
It is also advisable to verify whether the municipal zoning plan is consistent with the regional one, to ensure, for example, that the region does not have other plans for the land. In theory, you should be able to determine this from the municipality’s zoning plan, but our legal practice shows that there are occasionally exceptions that prove the rule.
Tip for article
Do you disagree with the changes to the zoning plan? Have these changes directly affected your property or the surrounding area, and are you concerned that they will significantly disrupt your life? Read on to find out how to challenge the zoning plan.
Check the status in the land registry: A fence does not always follow the property line
Always use the information recorded in the land registry as your basis. However, be sure to compare it with the actual situation. Fences or walls between properties may be misaligned. Ultimately, you might discover that you’ve purchased only a portion of the property that the seller had fenced off, while the rest belongs to someone else—such as the city.
The owner of the unlawfully occupied property may then demand reimbursement for unjust enrichment (since you were unlawfully using their property) or the demolition of the fence and the return of the land. “Restitution” in this context means relinquishing use of the land—simply moving the fence elsewhere and thereby reducing the size of your own property. A land purchase agreement should always explicitly define the exact area and boundaries of the property according to the cadastral map.
However, once the land purchase agreement has been signed, it will be too late to take action. Everything needs to be addressed while the seller is still willing to reach an agreement with you.
What to Check Before Signing a Land Purchase Agreement
Before you sign the purchase agreement, verify the following:
- who is the actual owner of the land according to the land registry,
- whether the title deed contains any easements, liens, restrictions on disposal, or seals,
- whether the actual boundaries match the cadastral map,
- whether the land has legally secured access from a public road,
- whether the intended use is permitted under the zoning plan,
- whether the necessary utility connections are available,
- whether the contract clearly specifies the purchase price and its payment,
- who will file the application for registration of ownership and when.
From Legal Practice: Too Many Easements Were Encumbering the Property
Mr. Štefan found a plot of land outside Prague. He wanted to build a Canadian-style log cabin on it. And to ensure that everything would go smoothly and without complications, he asked us to review the purchase agreement for the land.
According to the zoning plan, this plot was indeed a suitable site for such a project. However, we discovered several obstacles in the land registry. The plot was encumbered by more easements than is customary. These included the standard easements for water and gas utilities, but several neighbors also had easements registered. They had the right of way across the property and even the right to let their flock of sheep pass through.
In legal terms, we would describe this as a situation incompatible with peaceful coexistence with neighbors. Simply put, Mr. Štefan wouldn’t have had much peace there. Thanks to our warning, he ultimately backed out of his plan in time and chose a more suitable plot, just a short distance from the original one.
Before signing a purchase agreement for a property, consult with an expert who will review it for legal risks and alert you to any potential shortcomings. Only then can you be sure that you’re really buying what you think you are.
Summary
When purchasing land, before signing the purchase agreement, verify not only the price but, above all, the legal status in the land registry, easements and other restrictions, the actual boundaries and access to the land, and—for building lots—the permitted uses according to the zoning plan. The purchase agreement for land must be in writing, and the land must be correctly identified in it according to the land registry records. In practice, it is also advisable to specify in detail the purchase price and its payment, the transfer of the land, liability for defects, and the procedure for registration. However, simply signing the contract does not make the buyer the owner—ownership of the land registered in the land registry is acquired upon entry into the public registry.
Frequently Asked Questions
Do the signatures on a land purchase agreement have to be notarized?
In practice, it is advisable to have signatures notarized for the purposes of the registration process. If the signatures on a private deed of registration are not notarized, the applicant must prove their authenticity to the land registry.
Who pays the fee for filing a land registry application?
The law does not specify whether the fee is to be paid by the buyer or the seller. The parties may therefore agree in the contract who will file the application and who will pay the administrative fee.
Can I buy just a portion of the land?
Yes, but the portion must be properly delineated before the transfer. If the right being registered applies only to a portion of the parcel, a geometric plan must be attached to the deed.
What if there is no private access road to the property?
Before making a purchase, it is necessary to determine whether access is legally secured, for example, through ownership of the road, a co-ownership interest, or an easement. The mere fact that people routinely drive across a neighboring property does not necessarily guarantee the buyer a right of way.
Is it possible to withdraw from a purchase agreement if a problem with the property arises later?
It depends on the nature of the defect, the terms of the contract, and the circumstances of the specific case. Therefore, it is advisable to specify in the contract the seller’s representations regarding the legal and factual status of the land, as well as the consequences of any breach of those representations.
