Is a reservation of a real property always binding and subject to a fee?

No, a prospective buyer can reserve a property for up to 2 days without a commitment. This can be done in person, over the phone, or by e-mail, after a viewing or a meeting with our representative, without the need to pay a reservation fee, contractual guaranty, or a down payment on the purchase price. After the reservation period, either a written agreement is concluded, or the tentative reservation is cancelled.

I am interested in a property you offer. How can i contact you?

Our sales team is available on business days from 9:00 a.m. to 6:00 p.m. You can arrange a viewing of any of the properties we offer by telephone or you can visit our Client Centre at Kovářská 5, 190 00 Praha 9 - Libeň.

Can several properties be viewed during a single meeting?

Yes, it is possible to visit several properties during a single meeting, as long as it is logistically possible, with a view to the location of the properties in which the client is interested and the safety regulations at the construction sites concerned.

What is the difference between individual and co-operative ownership?

In the case of co-operative ownership, the purchaser owns a share in a housing co-operative, which guarantees him a right to enter into a lease agreement for an apartment, i.e., the right to use a specific apartment. The buyer, in this case the person acquiring a share in a co-operative, becomes a member of the housing co-operative which is the factual owner of the property in which the apartment (subject of lease) is located. A share in a co-operative can, just like an individually owned flat, be inherited, with the same treatment in estate proceedings.

In the case of a purchase of an individually owned property, the buyer becomes the direct owner of the property.

There are several advantages of co-operative ownership as compared to individual:

  • In the case of co-operative ownership, when buying directly from the housing cooperative, only a portion of the price of the apartment, or, more precisely, the share in the co-operative to which the right to rent an apartment is attached, is paid and the rest is paid to the housing co-operative in the form of a fee related to the use of a co-operative apartment, i.e., as one of the components of the tenant’s “monthly rent”. Once the total price of the share in the co-operative is paid up, the apartment may be transferred to the co-operative member’s individual ownership, at his request;
  • The simplicity of transferring one’s share in the co-operative. In the event of a transfer to a third party, the transfer agreement is not subject to registration in the Land Register and the transfer of a membership share is not subject to the co-operative’s consent, it needs only to be reported to the co-operative.

What about contracts? What type of a contract do we sign?

With each client, we sign the type of contract that corresponds to the given stage of project implementation. That means that, at the beginning, we sign a property reservation agreement, then an agreement to conclude a future purchase agreement, and then, to implement the actual purchase of the property by the client, a purchase agreement at the end.

For projects that have received an occupancy permit, purchase agreements can be signed straight away.

How can i finance a property purchase with GARTAL? Is the loan collateralised in any way?

Through its time-tested partners, GARTAL offers you the possibility of arranging the most advantageous financing for your home. We will also take care of collecting all of the documents necessary and of all communication with the bank, a valuer, and the Land Register. Our long-term cooperation with our partners allows us to secure the most advantageous conditions for you.

The loan is collateralised with a lien, which is one of the most common forms of debt collateralisation for the benefit of the loan provider. A lien is established by an agreement and registered in the Land Register prior to the purchase agreement. If the account payable is not paid, the creditor may sell the pledged item, i.e., the real property, and satisfy its account receivable from the proceeds. A lien is not linked to a person but, rather, to a property, meaning that when the property is sold or transferred to a new owner, the lien passes to the new owner, provided that the creditor’s receivable and all accessories have not been settled.

How are a mortgage and purchase of an apartment treated, from the point of view of common marital property? What is the procedure in the event of a divorce?

If a property is purchased during a marriage, it becomes a part of the spouses’ common property (“CP”) if the couple is married pursuant to the laws of the Czech Republic. That means that it belongs to both spouses indivisibly, and both spouses are liable (solidary liability) for any obligations arising in connection with a mortgage used to pay the purchase price or a part thereof. Nevertheless, CP may be narrowed by a notarial record and a property may be extracted from CP. If a property is extracted from CP and a mortgage has been provided for its purchase which has also been extracted from CP, only the spouse who owns the property will be liable for its repayment.

Another way that one spouse alone can acquire a property is by acquiring it with funds obtained prior to the marriage or received as a gift or inheritance during the marriage. Such funds do not become part of CP.

In the case of a divorce, the following options are available for a property owned as part of CPi:

  1. If the spouses settle before the divorce or within 3 years after the divorce, the property will become the ownership of one of the former spouses, with the other obtaining adequate financial compensation from the first spouse;
  2. If the spouses do not settle within 3 years of their divorce, ownership of the property transforms from CP into co-ownership by share of the two former spouses;

If the property is encumbered with a mortgage, both divorcing spouses bear solidary liability for it, i.e., jointly and severally. Mortgage settlement options:

  1. One of the spouses takes over the mortgage;
  2. The property is sold (either while CP still exists or subsequently, when the property is owned by the spouses in joint ownership) and the proceeds are used to repay the mortgage, with the remainder being split between the ex-spouses.

Is it possible to buy an apartment for someone else, for example, for an underage child?

Yes, a person has the right to acquire property from his birth. This means that even a minor may own a property. Nevertheless, a child only becomes competent to enter into agreements upon coming of age, i.e., upon reaching eighteen years of age. A purchase agreement therefore has to be concluded and signed on the child’s behalf by his statutory representatives, whose interests must not be contrary to the interests of the child, meaning that the said transaction is subject to oversight and consent by a guardian court which, among other things, appoints the said statutory representative. The court’s consent then constitutes an integral part of an application for the registration of the right of ownership in the Land Register. It must, however, be understood that owning a property is a commitment that involves obligations, such as the payment of fees related to the use of the property (fees for waste removal) or tax obligations (e.g., annual property tax).

Are there any other ways of restricting disposals with a property?

Another type of restriction of disposal with real properties are easements, which, for example, establish the right of a third party (other than the owner) to use the property or the right of the owner of a neighbouring property to use the property subject to the easement, for example, for the right of way or footpath, the right to drive cattle, etc.

Easements are linked to a person (in personam) or to a property (in rem) and are subject to registration in the Land Register.

Are GARTAL projects encumbered with loans for the financing of their construction?

Like most developers on Czech markets, GARTAL finances its projects with loans from reputable banks. This gives assurance to buyers that the construction does not depend on GARTAL’s fluctuating financial liquidity, coming from funds paid by buyers, and sufficient financing is secured from the very beginning for the construction and completion of the entire project. From the buyer’s point of view, this is the safest way to finance development, which is readily accepted by the mortgage banks of our clients – prospective buyers of properties in a specific project.

The money paid by buyers or their mortgage banks goes to a special project account controlled by the bank that has granted the project loan and GARTAL is not entitled to use the money. That way, the money cannot be abused for other purposes and is reserved exclusively for use in relation to the construction of the specific project.

I have heard the term “declaration of the building owner” (in czech: prohlášení vlastníka budovy). What is that?

The declaration of a building owner (Section 1166 of the Civil Code) is a legal action of a property owner (usually of a building) that defines individual residential and non-residential units, their accessories and parts, as well as common parts and rights and obligations related to their use. An owner’s declaration is subject to registration in the Land Register.

Do you give a warranty on the buildings you build? Are there any pitfalls to such a warranty?

GARTAL provides a standard warranty of 24 months from the acceptance of the property. That way, as the buyer, your warranty period is not reduced by the duration of the occupancy permit proceedings. Fixtures in the apartment are covered by the warranty given by their suppliers. Buyers receive from us all of the documents required for making a warranty claim.

The warranty period on common areas runs from the time the building was put in operation.

What taxes do i have to pay in the event of a real property transfer? Are there any other fees involved?

The following taxes may need to be paid on the transfer of a real property:

  • Income tax of 21% if the seller is a legal entity. The tax is paid by the seller.
  • Income tax of 15% if the seller is an individual. This tax can be avoided if the seller proves that he used the property prior to its sale (this is not conditioned on him having his permanent residence there) for at least two years or owned the property for 10 years prior to its sale, or if the seller proves that he has used the proceeds for addressing his housing.
  • Income tax must also be paid if a property is gifted (gratuitous transfer) with the following exceptions:
    • Exempt from income tax are gratuitous transfers from lineally related relatives, i.e., in particular between grandchildren, children, parents, and grandparents;
    • Furthermore, exempt are transfers from a relative in a collateral line, i.e., from a spouse, uncle, aunt, niece or nephew, spouse, the spouse of your child, your spouse’s child (stepson/daughter), spouse’s parents (father/mother-in-law) or your parent’s spouse;
    • Even if the persons involved are not related, exempt is income from a person with whom the beneficiary cohabited for at least one year prior to receiving the gift, in a commonly managed household, and for that reason, he cared for the household or was dependent on the person for his subsistence.

Registration in the Land Register is subject to a CZK 2,000 administrative fee. The flat fee is charged for every agreement on the basis of which a transfer takes place, regardless of the number of properties covered by the agreement. For purchases of properties from the GARTAL portfolio, that fee is paid by our company.

What is required for successful registration in the land register?

Essential for successful registration in the Land Register is a written agreement on the basis of which the real property is transferred or passes to a third party. Aside from the said agreement (title transfer document), an application for registration must be completed, using the prescribed form (which is available at nv.cuzk.cz/Web/Uvod.aspx). An application may be submitted by any party to the property transfer agreement. By law, the Land Register Authority must wait for 20 days, during which registration cannot be made even if all background documents are in order. Only after the expiration of that statutory period can registration be made for the benefit of the person acquiring ownership of the property. Usually, the proceedings take one calendar month.

The buyer becomes the owner of the property upon the registration of his ownership in the Land Register, which is registered retroactively as at the date of the delivery of the application for registration to the Land Register Authority, with which the relevant ownership transfer document is enclosed.

What is the property tax rate? When is it due?

Every owner of a real property (apartment, house, land) registered as the owner in the Land Register, as at 1 January of the given year, must file a property tax return by the end of January of that year and pay the tax by the end of May of the same year.

The calculation of property tax depends on the type of property, its purpose, size, and coefficient specific to the size and type of municipality in which the property is located.

Why must there be a condominium association? What rules apply to a condominium association?

Pursuant to the Civil Code amendment applicable from 1 July 2020, a condominium association (CA) shall be established, provided it had not been established earlier, by unit owners in a building comprising at least five units, of which at least four are held by four different owners.” Unless the existence of a condominium association is proven, no other owner’s ownership of a unit subject to transfer may be registered in the Land Register. CAs can be established on a voluntary basis, even in buildings that do not meet the statutory requirements for their mandatory establishment.

A CA is established upon the approval of its Articles of Association in one of the following three ways: in a declaration, made pursuant to Section 1166 of the Civil Code; in an agreement on construction, pursuant to Section 1170 of the Civil Code; or by consensual legal action of all unit owners aimed at its founding, pursuant to Section 1200 of the Civil Code.

A condominium association is a legal entity whose competences are limited to building management.

The existing CA in the building takes care of building management and addresses issues pertaining to common areas and will carry on even while ownership of individual units is being transferred.

How is heat consumption metered in individual apartments?

A separate heat meter is installed in each residential unit.

What makes accommodation units and studios specific?

Studios are categories of non-residential units that have all the attributes of an apartment – i.e., bathroom and toilet, kitchen corner, but for reasons of hygiene regulations (noise limits, level of lighting), they cannot receive an occupancy permit as apartments, only as non-residential premises – studios. A person cannot register his permanent residence there, but they can be rented. Nevertheless, such a lease agreement should be phrased as an agreement on the lease of a non-residential unit. If the buyer of a studio is a VAT payer and he uses the studio for economic activities, he can request a VAT refund, thereby obtaining back a fifth of the price of the property.

Accommodation units also qualify as non-residential premises that meet all requirements of habitation, but in certain cases, permanent residence can be registered in them.

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