What to look out for when entering into a property sale contract?

A contract for the sale of real estate is a legal transaction that comes into effect upon the filing of consensual declarations of intent by both parties in the appropriate form. For a real estate sale contract to be valid, it is required that the parties to the contract make their declarations of intent in the form of a notarial deed. This form has been reserved under pain of nullity. If this form is not observed, the legal act will not be valid, which means that it will not be deemed to have taken place and will not produce legal effects.
A contract of sale also requires the so-called essentialia negotii, i.e. certain contents necessary for its conclusion, i.e. the price and the unambiguous designation of the parties and the property.
Elements of the contract that are not necessary, but can be placed and are usually included in the contract, include: designation of the date of delivery of the property, method of payment, deposit, advance payment, declaration of submission to execution, etc.
In a contract for the sale of immovable property, the purpose of which is to transfer the right to the thing (i.e. having a dispositive effect), no condition or term may be stipulated. A provision introducing a condition or time limit may, however, be included in a contract having the sole effect of binding the sale of the property. However, in such a case, the expiry of a time limit or the fulfilment of a condition does not by itself result in the transfer of the ownership right to the real estate. An agreement with a dispositive effect is additionally required for the transfer of the property right.

Before purchasing a property, it is worth checking the following legal aspects:

• whether there is a local development plan in force for the area of the property and what its content is,
• if the property is not subject to a local plan, it is worthwhile to determine which provisions of the municipality’s general plan (or, in the absence of a municipality’s general plan, which provisions of the municipality’s zoning study) apply to the property,
• whether planning permission or zoning decisions have been issued for the property,
• if these decisions have not been issued for the property, whether there may be obstacles or restrictions to obtaining these decisions,
• whether the right of pre-emption does not apply to the property,
• whether any statutory restrictions on the acquisition or disposal of the property apply to it,
• whether the other party to the legal action has full legal capacity (in the case of natural persons) or whether he or she is duly authorised to act in the name of and on behalf of the organisational unit (in the case of legal persons or incapacitated legal persons) as a member of the management board or as a partner entitled to self-representation,
• in the case of a power of attorney, whether it was granted in the form of a notarial deed, whether the attorney is acting within the limits of his/her authority and whether the power of attorney was granted in compliance with statutory or contractual requirements (in the case of legal persons and legal disabilities),
• whether the legal person or de facto legal person has a document showing that the consent to the disposal or acquisition of the property has been obtained from the competent authorities and in accordance with the contractual and statutory requirements,
• whether there are any entries in the land register that have effect against the purchaser of the property, in particular whether there are any entries in the mortgage section of the land register,
• whether the property has access to a public road or whether it is necessary to apply for a necessary road easement,
• whether it will be necessary to obtain permits to cut down trees or to demolish or demolish buildings.

The above list is illustrative.
Legal status as at 30.10.2024