Escrow When Selling Real Estate in the Czech Republic: Lawyer, Notary, or Bank

Escrow When Selling Real Estate in the Czech Republic: How to Choose an Escrow Method

The sale of an apartment can be agreed in a single day, contracts signed within a few hours, and the money prepared for transfer almost immediately. However, ownership does not pass to the buyer at the moment the purchase agreement (kupní smlouva) is signed. Between signing the documents, making the payment, and registering the new owner in the real estate cadastre (katastr nemovitostí), there is a period during which neither the buyer nor the seller wants to depend entirely on the other party.

This is exactly the problem solved by escrow (úschova peněz). The buyer transfers the money to an independent escrow holder, but the seller receives it only after predetermined conditions have been fulfilled, primarily after the buyer’s ownership has been registered.

In practice, the choice of escrow holder usually comes down to three options: a lawyer, a notary, or a bank. Less commonly, the real estate agency itself holds the money in escrow. At first glance, the difference between these options may appear to be mainly about price. In reality, they differ in the level of institutional protection, contractual flexibility, liability of the parties, speed of document preparation, and even the point at which the buyer is legally considered to have fulfilled the obligation to pay the seller.

The last point is particularly important. If something happens to the money in the escrow account, the answer to the question “who lost the money” depends not only on who held the funds. The wording of the purchase agreement and the escrow agreement is extremely important.

Why Escrow Is Needed When Selling Real Estate

A standard real estate sale creates the classic problem of two reciprocal obligations.

The seller wants to receive the money before they cease to own the apartment. The buyer, on the other hand, does not want to transfer several million Czech crowns directly to the seller while the apartment still legally belongs to the seller.

It is technically impossible to transfer the apartment and the money at exactly the same moment. The buyer acquires ownership of the property only after the transfer of ownership is registered in the cadastre.

In addition, cadastral proceedings take time. The cadastral authority cannot approve the registration before the twenty-day protective period following notification of the affected parties has expired. In June and July 2026, the average time required to register ownership in the Czech Republic was 22 days.

This means that even in a completely standard transaction, approximately three weeks usually pass between the transfer of the money and the final registration of ownership.

During this period, circumstances may arise that the parties did not expect. The cadastre may identify a defect in the documents, the application may be rejected, a new entry or restriction may appear on the property, or one of the parties may face enforcement proceedings or another legal issue.

For this reason, the model “the buyer first transfers the entire amount to the seller, and then we submit the documents to the cadastre” creates unnecessary risk for the buyer. The opposite arrangement, where the seller first transfers ownership and then hopes to receive the money, is equally inconvenient for the seller.

An independent escrow holder breaks this dependency.

We have already explained the twenty-day protective period in more detail here: https://www.gethome.cz/20-dnevnyj-srok-v-kadastre-chehii/

How Escrow Works When Selling an Apartment or House

In a standard transaction, the mechanism works as follows.

The buyer, seller, and escrow holder agree on the conditions for holding the funds. The buyer transfers the agreed portion or the entire purchase price to a special account. Once the money has been received, an application to register ownership (návrh na vklad vlastnického práva) can be submitted to the cadastre.

The escrow holder cannot arbitrarily decide when to release the money. The release conditions must be set out in the agreement in advance.

For a standard apartment sale, the main condition is usually the submission of a current cadastral extract showing that the buyer has been registered as the new owner and that no unexpected restrictions have been recorded against the property.

In a more complex transaction, the conditions may include repayment of the seller’s existing mortgage, removal of the old lien, registration of the buyer’s bank’s new lien, payment of part of the price to the seller’s bank, payment of the remaining amount to the seller, and other steps.

A good escrow agreement therefore cannot be considered separately from the purchase agreement. Both documents must work as a single mechanism.

This is where attorney escrow is often particularly convenient: one lawyer prepares the purchase agreement, the escrow agreement, and the cadastral application and can coordinate all deadlines, conditions, and payment sequences between them.

Who Bears the Risk if the Money Disappears from the Escrow Account

This question deserves a separate section because there are many oversimplified explanations surrounding it.

In practice, the parties often link the allocation of risk to who proposed the particular escrow holder. If the lawyer or another escrow method is proposed by the seller or the seller’s agency, the buyer may insist that their payment obligation be considered fulfilled as soon as the entire agreed amount reaches the escrow account. If the buyer chooses the escrow holder, the seller may instead seek to link final fulfilment of the payment obligation to the actual receipt of the funds by the seller.

This is not an automatic rule of law, but a matter of agreement and bargaining position between the parties. The legal outcome in a particular transaction depends primarily on how the purchase agreement and escrow agreement are drafted.

Czech case law shows that the wording of the agreements is decisive: the parties may agree that the escrow account is the place where the buyer fulfils the payment obligation and may expressly define the moment when the purchase price is deemed to have been paid.

In practice, there are two main arrangements.

Option 1: Payment into Escrow Is Considered Fulfilment of the Buyer’s Obligation

The agreement can expressly state that the buyer’s obligation to pay the purchase price is considered fulfilled when the relevant amount is credited to the agreed escrow account.

If the buyer transfers the money correctly and on time and the agreement links fulfilment of the obligation specifically to receipt of the funds in escrow, subsequent misappropriation of the money by the escrow holder does not in itself mean that the buyer becomes indebted to the seller again.

In such a case, claims connected with the disappearance of the funds would primarily be directed against the escrow holder and other responsible persons depending on the circumstances.

This is why the wording defining the moment when the payment obligation is fulfilled is just as important in practice as the choice of the escrow holder itself.

Option 2: The Obligation Is Fulfilled Only After the Seller Receives the Money

The parties may agree differently, for example that the buyer’s obligation is discharged only after the money is actually credited to the seller’s account.

In that case, transferring the money to the escrow holder is only an intermediate step and does not in itself constitute final fulfilment of the buyer’s obligation.

If something happens to the money before it is paid to the seller, the consequences will be allocated differently and will require an assessment of the specific contractual terms.

For this reason, when agreeing the transaction, we recommend checking not only who will act as the escrow holder, but also the exact wording defining when the purchase price is considered paid.

During negotiations, it is entirely logical to connect this wording with which party proposed the escrow holder and is effectively asking the other party to accept the associated risk. This approach is a matter of contractual practice rather than an automatic rule of law.

If this issue is particularly important to the buyer, it is better to agree it as early as possible, already at the reservation agreement stage. The key payment principle will then be fixed before the final purchase agreement and escrow agreement are prepared.

Attorney Escrow: The Most Common Option

Attorney escrow (advokátní úschova) remains the most familiar solution on the Czech real estate market.

The reason is quite practical. When a property is sold through an agency, the agency usually works with a cooperating law firm. The lawyer prepares the purchase agreement, the escrow agreement, documents for the cadastre, verifies signatures, and handles the legal side of the transaction.

When selling without an agency, the parties can choose any lawyer who provides this service. The Czech Bar Association (Česká advokátní komora, ČAK) expressly emphasizes the client’s right to freely choose a lawyer. A buyer cannot be forced to use only the lawyer proposed by the agency.

Attorney escrow (úschova) has one important practical advantage: flexibility.

Suppose the seller’s apartment is mortgaged with one bank, the buyer finances the purchase with a mortgage from another bank, part of the buyer’s own funds has already been paid as a reservation payment, and three separate transfers need to be made after registration. For a lawyer, this is a standard task that can be described in the agreement.

The lawyer can also make changes quickly if the bank issues a new confirmation, changes the technical account number, or requires the payment sequence to be adjusted.

In our practice, this ability to adapt the documents to the specific transaction often matters more than a small difference in the price of the escrow service.

What Changed in the Security of Attorney Escrow (advokátní úschova) in 2026

For a long time, the weak point of the attorney escrow model was the human factor.

Law and professional rules had already required lawyers for years to keep client money separate from their own funds, use special accounts, and register escrow arrangements in the Electronic Escrow Register (Elektronická kniha úschov, EKÚ).

The problem was different. Control over a significant portion of the information depended on the lawyer. If a dishonest person decided to violate the rules, professional duties alone might not have been sufficient.

Following widely discussed cases involving misuse of client funds, the system was significantly strengthened.

Since 2026, the lawyer provides the bank with the contact details of the escrow participants, and the bank directly informs them that the special account exists. Clients receive information about movements of funds regardless of whether the lawyer chooses to report the transaction. Information about the escrow arrangement is simultaneously entered into the ČAK system.

This is an important change. Control is no longer based solely on the model that “the lawyer is required to do everything correctly.”

An independent information channel from the bank has been added.

Since January 1, 2026, the Guarantee Fund of the Czech Bar Association (Garanční fond ČAK) has also been operating to mitigate losses caused by criminal conduct by a lawyer when holding client funds in escrow.

The maximum compensation is CZK 2.5 million per escrow arrangement, while for escrow of the purchase price from the sale of real estate designated in the cadastre for residential purposes, the limit may reach CZK 5 million.

For the market, this represents a significant strengthening of protection, but the fund should not be regarded as full insurance for the transaction.

If CZK 12 million is held in the account, the ČAK Guarantee Fund covers only the amount within the applicable limit, provided all compensation conditions are met. The remaining CZK 7 million is not guaranteed by the fund. This does not mean that it is automatically lost: it may be recovered from the responsible lawyer and, where grounds exist, insurance compensation or other legal remedies may be pursued. However, recovery of this part of the amount is not guaranteed and may depend on the outcome of an investigation, court proceedings, the financial position of the responsible person, and the terms of insurance.

For a large transaction, we would therefore look at several layers of protection at once: the lawyer’s reputation, the correct special account, registration of the escrow, receipt of bank notifications, the contractual terms, and the applicable limit of the Guarantee Fund.

What Buyers and Sellers Should Pay Attention To

After signing the agreement, it is not enough simply to receive an account number from the lawyer in an ordinary email.

The participants should carefully monitor official notifications, verify the account number and payment details, and independently check any unexpected changes. Particular caution is advisable if, shortly before the payment, a new email arrives asking for several million Czech crowns to be sent to an “updated account.”

For large payments, verifying the payment details through an independent channel takes only a few minutes and may prevent a very expensive mistake.

How Much Attorney Escrow Costs

Attorney escrow (advokátní úschova) has another advantage: the price is determined by agreement.

The attorney tariff (advokátní tarif) does not set the price of attorney escrow itself. ČAK expressly states that a lawyer’s fee for holding money in escrow is always contractual.

Two lawyers can therefore charge completely different prices for holding the same amount.

Law firms that regularly cooperate with real estate agencies often charge a fixed price for a standard transaction regardless of whether the apartment is sold for CZK 6 million or CZK 12 million. Standard escrow services can be found on the market for amounts starting from several thousand crowns. A fee of around CZK 6,000 excluding VAT for a simple transaction is entirely realistic, but this is a market-based contractual price, not a state-regulated tariff.

The price may include preparation of the escrow agreement, monitoring the cadastre, release of funds, communication with the parties, and other activities. The purchase agreement and other legal work may be charged separately.

When selling through an agency, the cost of the cooperating lawyer is often already included in the agency commission.

This combination of a reasonable price, speed, legal assistance, and flexibility explains the popularity of attorney escrow.

Notarial Escrow: High Formalization and Tariff-Based Pricing

Notarial escrow (notářská úschova peněz) works according to a similar economic principle: the money is deposited into a special notarial account and released only after the agreed conditions have been fulfilled.

However, the legal and organizational structure differs.

A separate notarial account is maintained for each notarial escrow. The conditions are recorded in a notarial escrow protocol (protokol o notářské úschově), which is signed by the relevant participants and the notary. Once the money has been accepted, the notary is bound by the terms of that protocol.

Another common terminological point should be clarified here. The escrow of the purchase price itself is documented by a notarial escrow protocol. This does not mean that for every such transaction the parties must enter into an escrow agreement specifically in the form of a notarial deed (notářský zápis).

The main difference compared with a lawyer is the price.

The notary’s remuneration is determined by the notarial tariff (notářský tarif), and the calculation is based on the amount deposited in escrow.

For example, for an escrow amount of CZK 12 million, the calculation under the current tariff is:

• CZK 1,200 for the first CZK 100,000,
• CZK 2,400 for the portion from CZK 100,000 to CZK 500,000,
• CZK 2,000 for the portion from CZK 500,000 to CZK 1 million,
• CZK 18,000 for the portion from CZK 1 million to CZK 10 million,
• CZK 2,000 for the remaining CZK 2 million.

The total is therefore CZK 25,600 excluding VAT, or approximately CZK 30,976 including 21% VAT, excluding any additional expenses.

For large amounts, the difference compared with a lawyer’s contractual fee becomes noticeable.

The government portal also states that the maximum standard tariff base for this calculation is limited to CZK 30 million, producing a fee of CZK 43,600 excluding VAT. In complex cases or where a foreign language must be used, the notarial fee may be increased if the relevant conditions are met.

If the notary also prepares other legal documents for the transaction, their cost is calculated separately according to the applicable rules.

For this reason, a combined model is sometimes used in practice: the purchase agreement is prepared by a lawyer, while the parties use a notary only for escrow of the purchase price.

Is It True That the State Is Liable for a Notary?

There is a persistent myth surrounding notarial escrow: because a notary is supposedly a representative of the state, the Czech Republic will automatically compensate the entire loss if anything happens to the money.

You should not rely on such a guarantee.

Under the Notarial Code (notářský řád), a notary is a natural person entrusted by the state with a notarial office. To begin practising, the notary must carry professional liability insurance. However, the fact that the notary is appointed by the state does not create an unconditional state guarantee for every amount held in a notarial account.

Professional liability insurance should also not be viewed as insurance that will automatically compensate intentional misappropriation of tens of millions of Czech crowns under all circumstances. The legal classification of the event, insurance terms, and applicable limits are relevant to each particular insurance case.

The professional barrier to becoming a notary is very high. It is a regulated profession, a notary is appointed to a notarial office, is subject to professional and state supervision, and a serious breach may result in the loss of status and career.

This is an important part of the system of trust.

A person spends years obtaining education and experience, passes through professional stages, and holds an office that provides a stable and prestigious source of income. Deliberately misappropriating millions belonging to clients means risking criminal prosecution and effectively destroying the entire professional career.

A similar logic also applies to lawyers: the right to provide legal services is linked to membership in ČAK and compliance with professional rules.

Notaries also have strengthened technical control mechanisms for special accounts. Trust in the notarial model therefore remains high.

However, we would distinguish between two concepts: the high reliability of the notarial institution and an absolute state guarantee of the money. The second guarantee does not exist.

Bank Escrow: Maximum Institutional Security

Some banks offer a special blocked or escrow account (vázaný účet, jistotní účet) or a purchase price administration agreement.

For the client, the principle is familiar: the buyer transfers the money to the bank, the bank blocks it in accordance with the agreement and pays it to the seller once the required documents have been provided.

The key difference lies in who actually controls the funds.

With attorney or notarial escrow, the protection system is still built around a particular professional and their special account. A banking product, by contrast, is administered directly by the bank as a financial institution with its own internal procedures, segregation of duties, compliance, and control mechanisms.

From the perspective of the risk of intentional misappropriation by a single escrow holder, this is the strongest of the standard options available.

For this reason, clients whose main priority is minimizing the human factor often regard bank escrow as the most reassuring option.

However, no bank can offer an absolute guarantee against every possible financial event either. Funds held at banks are subject to a separate regime of banking law and deposit insurance. For an ordinary transaction, the main practical difference is that the fate of the purchase price does not depend on the decision of one particular lawyer or notary.

Why Bank Escrow Is Used Less Often Than You Might Expect

The downside of bank escrow is standardization.

You can explain a complex transaction structure to a lawyer, receive a draft agreement, discuss five release conditions, and have an agreed amendment made within a few hours.

A bank works differently. Its legal and compliance processes are designed around a standardized product.

The further a particular transaction departs from the standard model of “the buyer deposits the money — the buyer is registered — the seller receives the money,” the more time approval may require.

Some banks allow individual amendments only for an additional fee.

For example, Raiffeisenbank publicly states a standard price of CZK 7,000 for a vázaný účet when the bank’s own agreements are used and no legal consultation is required.

Komerční banka offers a purchase price administration agreement (Dohoda o správě kupní ceny) for 0.2% of the amount, with a minimum of CZK 6,000 and a maximum of CZK 20,000. An individual modification requested by the client costs 0.4% of the amount, with a minimum of CZK 12,000. An existing KB account is not required to enter into such an agreement.

UniCredit Bank also uses a product similar to an escrow account (jistotní účet), and its banking tariffs may calculate the fee based on the amount deposited. When selecting a bank, the specific availability and current price should always be checked immediately before the transaction, because banking products and tariffs change much more frequently than legislation.

According to the tariff schedule of ČSOB, the bank provides a service for preparing a purchase price payment agreement for 0.1% of the amount, with a minimum of CZK 13,000. The service is available when arranging a mortgage with ČSOB Hypoteční banka or a loan with ČSOB Stavební spořitelna.

This is exactly why we do not recommend creating a universal list in advance saying “this bank works with everyone, this one only with mortgages, and this one does not provide the service.” Such comparisons quickly become outdated.

Before a specific purchase, it is more sensible to check three things: whether the product is available to the parties to the transaction, how much it costs, and whether the bank will agree to the required release mechanism.

Bank Bureaucracy and AML

Another factor is customer identification and anti-money laundering (AML) procedures.

A bank must identify the participants, verify the purpose of the transaction and, where necessary, the origin of the funds. The law expressly provides for situations where a financial institution must refuse a transaction or business relationship if the required identification or customer due diligence cannot be carried out or the client does not provide the required information.

For foreigners, this can sometimes become particularly noticeable.

Foreign citizenship alone is not a reason for automatic rejection. Difficulties may arise if the bank has difficulty verifying the origin of the money, the economic purpose of the transaction, the client’s connection to the Czech Republic, the structure of a foreign company, or other information that its internal AML process considers necessary.

Previous problematic banking history may also affect the bank’s internal assessment of the client.

Therefore, if not all parties to the transaction are Czech citizens or the transaction contains a foreign element, we recommend checking in advance whether the selected bank can provide the service, before signing documents that unequivocally assume the use of bank escrow.

Can a Real Estate Agency Hold Money in Escrow?

Czech legislation allows this possibility, but specifically restricts it.

The Real Estate Brokerage Act (zákon o realitním zprostředkování) prohibits an intermediary from routinely offering its own escrow service as a standard service. The agency may arrange escrow through a bank, notary, or lawyer. It may accept client funds itself only if special conditions are met, in particular after a separate written request from the client, under a written agreement, and using a separate account for the specific escrow arrangement.

This is why most professional agencies prefer not to accept multimillion-crown purchase prices into their own accounts at all.

There is also the issue of independence.

A real estate agency usually already represents the commercial interests of one party to the transaction, most often the seller who engaged it to sell the property. Adding the role of escrow holder for the entire purchase price is often simply unnecessary when the market offers regulated lawyers, notaries, and banks.

In addition, establishing and operating a real estate agency is considerably easier than completing the entire professional path required to become a lawyer or notary.

For all these reasons, an agency holding money in its own escrow arrangement remains more of an exception than the preferred method of settlement.

Can You Choose Your Own Lawyer, Notary, or Bank?

Yes, the parties may agree on a different escrow holder even if the agency has already proposed its own lawyer.

For attorney escrow (advokátní úschova), ČAK expressly emphasizes the right to freely choose a lawyer.

However, the buyer cannot unilaterally replace the escrow holder in an already agreed transaction structure. The seller must also agree to entrust a potentially multimillion-crown purchase price to the selected person or bank.

Who pays the cost is a matter of agreement.

If the agency has included the work of its lawyer in its commission and the buyer wants to use a completely different law firm or bank, it is reasonable to expect that the additional cost will be borne by the party that requested the alternative option. This is common commercial practice, not a universal legal rule.

Special attention must be paid to the previously discussed issue of the moment when the purchase price is considered paid.

In practice, the choice of escrow holder often also affects negotiations over risk allocation. If one party proposes the escrow holder, the other may reasonably request contractual wording under which the risk associated with the chosen escrow holder does not remain with them. Legally, however, this works only if the relevant allocation of risk is actually reflected in the documents.

The issue should therefore not be a dispute over whose lawyer or bank is being used, but a clear contractual definition of the moment when the payment obligation is fulfilled.

For a transaction worth several million Czech crowns, a single sentence defining fulfilment of the payment obligation may be considerably more important than saving a few thousand crowns on the escrow fee.

Comparison of Escrow Methods

Method	Who Controls the Money	Cost	Flexibility	Main Advantage	What to Pay Attention To
Attorney escrow	A specific lawyer through a special account	Contractual, often fixed	Very high	Conveniently combines contracts, cadastre, and payments into one legal structure	Lawyer’s reputation, escrow registration, bank notifications, release conditions
Notarial escrow	A notary through a separate notarial account	According to the notarial tariff, depending on the amount	Medium	Strong formalization, high professional entry barrier, and supervision	For large amounts, the price increases significantly; the state does not provide an unconditional guarantee for the entire amount
Bank escrow	Bank	Depends on the bank and product	Usually lower than with a lawyer	Minimal risk of misuse by a single individual	Bureaucracy, AML, standard terms, limited possibility of individual amendments
Agency escrow	Agency under specific legal conditions	Individual	Depends on the agency	Can sometimes be organizationally convenient	Legal restrictions, conflict of roles, no obvious advantage over a professional escrow holder

How to Choose the Right Option

For an ordinary apartment sale without a complex financing structure, attorney escrow still appears to be the most balanced solution.

It is usually quick to arrange, reasonably priced, allows one lawyer to connect the purchase agreement with the release conditions, and since 2026 it has gained additional layers of control from banks and ČAK.

At the same time, we would not recommend choosing a lawyer simply because the agency has already inserted their name into the draft agreement. It is worth checking the lawyer in the ČAK register, understanding how the escrow will be registered, which account the money will be sent to, and what notifications the participants will receive.

Notarial escrow (notářská úschova) is suitable for clients who want a highly formalized mechanism and are prepared to pay the tariff-based fee. With a very high purchase price, the cost may already reach tens of thousands of Czech crowns.

We consider bank escrow particularly interesting in transactions where the parties prioritize institutional security and are prepared to accept stricter banking procedures. For a standard transaction, the price charged by some banks today is quite comparable to attorney escrow.

In a complex transaction involving several mortgages, staged payments, foreign participants, or non-standard conditions for transferring the property, the advantage often shifts back to a good lawyer because the lawyer can quickly create an individual structure and coordinate all the documents.

When buying real estate, it is also useful to understand all the other transaction costs in advance. We discussed this topic in detail here: https://www.gethome.cz/rashody-pri-pokupke-kvartiry-v-chehii/

Practical Conclusion

The main purpose of escrow when selling real estate is not simply to insert a third party between the buyer and seller. A good escrow service should make the entire period between payment and registration of ownership secure.

For most standard transactions, a lawyer remains the most practical option because of speed, flexibility, and the ability to prepare the full set of documents. Following the 2026 changes, the level of protection for attorney escrow has increased significantly: additional bank control and the ČAK Guarantee Fund have been introduced.

A notary provides a high level of formalization and professional supervision, but the fee depends directly on the amount, so for expensive properties the difference compared with attorney escrow becomes significant.

A bank best eliminates the risk of misuse by a single individual, but institutional security comes with stricter procedures, standardized agreements, and sometimes lengthy approval.

We do not consider an agency’s own escrow service to be the first-choice option in a standard transaction. The law itself is structured so that an agency should primarily arrange escrow with a specialized entity rather than collect buyers’ money in its own accounts.

Finally, the most expensive mistake is to focus on choosing the escrow holder without reading the payment mechanism in the agreement. It is important to understand in advance when the buyer is legally considered to have paid the purchase price, under what conditions the escrow holder may release the money, and what happens if the cadastral registration is not completed.

In real estate transactions, the documents are what allocate the risks.

At Get Home, we recommend assessing escrow together with the entire transaction structure: the purchase agreement, mortgage, cadastral conditions, and sequence of payments. We also help clients with this as part of our real estate purchase assistance service. The choice between a lawyer, notary, and bank then becomes not a matter of habit, but an informed decision.

FAQ

Is Escrow Mandatory When Selling Real Estate in the Czech Republic?

For an ordinary purchase and sale, the parties primarily agree on the method of payment. In practice, escrow is a standard and sensible mechanism because approximately three weeks pass between payment and registration of ownership. Transferring the entire price directly to the seller before registration creates significantly greater risk for the buyer.

Which Escrow Method Is the Safest?

From the perspective of minimizing the risk of deliberate misuse by one individual, the banking model appears strongest. Attorney escrow (advokátní úschova) and notarial escrow (notářská úschova) are also regulated mechanisms with several layers of protection. Overall security also depends on the wording of the agreement, correct account setup, and compliance with procedures.

Can the Buyer Refuse to Use the Lawyer Proposed by the Agency?

Yes. ČAK expressly states that the client has the right to freely choose a lawyer. Replacing the escrow holder in a specific transaction requires the consent of the other party because the payment terms form part of the overall agreement.

Who Pays for Escrow?

The parties determine this by agreement. If legal assistance is already included in the agency commission and one party insists on another paid escrow arrangement, that party often bears the additional cost. There is no universal rule automatically requiring the buyer or seller to pay.

Is Notarial Escrow Guaranteed by the State?

The state appointment of a notary does not mean that the Czech Republic provides an unconditional guarantee for the entire amount held. A notary must carry professional liability insurance and operates under a strictly regulated regime, but this is a different protection mechanism.

Does the ČAK Guarantee Fund Protect the Entire Purchase Price?

No. Since 2026, the maximum compensation is CZK 2.5 million per escrow arrangement and up to CZK 5 million for certain residential real estate transactions. If the property price exceeds this limit, the entire amount is not automatically covered by the fund.

What Happens if the Cadastre Rejects the Registration?

A properly drafted escrow agreement defines this scenario in advance. The money should not automatically be released to the seller. The agreement usually provides a period for correcting the problem or the return of the funds to the buyer if the transaction is finally terminated. The exact mechanism depends on the documents.

If a Lawyer Steals the Money After the Buyer Deposits It in Escrow, Does the Buyer Have to Pay Again?

The answer depends on the wording of the agreement. If the escrow account was agreed by the parties as the place for fulfilment of the payment obligation and the buyer correctly transferred the entire amount there, case law allows the conclusion that the obligation was already fulfilled by that payment. Under a different contractual arrangement, the result may differ.

Can a Bank Refuse to Provide Bank Escrow to a Foreigner?

A bank may refuse to provide the product following its own review, but foreign citizenship alone does not mean automatic rejection. Difficulties are more often connected with AML, the origin of funds, inability to establish required information, or the bank’s internal risk assessment of the client.

Should You Choose a Notary Simply Because It Seems Safer Than a Lawyer?

The entire transaction should be compared. For a standard transfer, a notary may be convenient, but for high-value real estate the tariff is significantly more expensive than contractual attorney escrow. Following the strengthening of the attorney escrow system in 2026, the difference between the protection mechanisms has also become smaller than it was several years ago.

Disclaimer

This material is for informational purposes only and does not constitute individual legal advice. The terms of a particular transaction, applicable rules, tariffs, and banking procedures may differ and change over time. The assessment of legal consequences always depends on the content of the specific agreements, the status of the transaction participants, and the factual circumstances.