When the seller receives the money held in escrow, what attorney, notary and bank escrow costs, and how to proceed when paying from abroad or in a foreign currency. A practical guide for buyers and sellers alike.
Holding the purchase price in escrow (úschova kupní ceny) protects both parties when a property is bought. The buyer deposits the money with an independent escrow holder (a lawyer, a notary or a bank), who releases it to the seller only once the buyer has been entered in the Land Registry (katastr nemovitostí) as the owner and any other conditions set out in the contract have been met. When set up correctly, all three options are safe. They differ mainly in cost and flexibility.
How property transfers work in the Czech Republic and why you do not pay the seller directly
Under Czech law, ownership of real estate does not pass when the purchase contract is signed. It passes only on registration (vklad) in the Land Registry. Registration takes effect retroactively from the day and hour the application was filed. However, the Land Registry office cannot approve it until a 20-day protective period has expired. This period begins when notice is sent to the current owner and other affected parties. The administrative fee for an application for registration is CZK 2,000. If the application is completed and submitted electronically through the Land Registry's online application, the fee is 20 per cent lower. As a result, several weeks usually pass between signing the contract and the entry in the register.
If the buyer pays in advance, they bear the risk that registration will not take place, for example because the application is rejected or because the seller is subject to enforcement proceedings (exekuce) or insolvency. If, on the other hand, the seller filed the application for registration before receiving the money, the risk would be theirs. Escrow bridges this period: the money is demonstrably available, but the seller receives it only once the transfer has been completed.
Attorney, notary and bank escrow: differences, cost and security
Attorney escrow (advokátní úschova) is governed by the Legal Profession Act (zákon o advokacii). The lawyer must hold a dedicated bank account designated as an attorney escrow account, which may not contain any other funds, and must enter into a written agreement with the clients. Cash deposits and withdrawals are prohibited. Since 1 January 2026, lawyers have been required to report every escrow to the new Electronic Register of Escrows (Elektronická kniha úschov), which is maintained by the Czech Bar Association (Česká advokátní komora). The bank also sends clients confirmation that the account exists, along with information on transactions in it. In addition, the Bar Association administers a Guarantee Fund (Garanční fond), which can compensate clients who suffer loss as a result of a lawyer's criminal conduct in connection with an escrow: up to CZK 2.5 million per escrow, or up to CZK 5 million where the purchase price relates to residential property. The lawyer's fee is not fixed. It is agreed between the parties and is often included in the price for preparing the whole transaction.
Notarial escrow (notářská úschova) is based on the Notarial Code (notářský řád), and its price is set by the notarial tariff, namely Decree No. 196/2001 Coll. The fee is calculated on the amount deposited in decreasing bands: 1.2 per cent of the first CZK 100,000, then 0.6, 0.4, 0.2 and 0.1 per cent in turn. Any amount above CZK 30 million is not taken into account. The minimum fee is CZK 1,000. For an escrow of CZK 10 million, the fee therefore comes to CZK 23,600 excluding VAT. If the notary drew up the contract to which the escrow relates, only one tenth of the fee is payable. Where the notary is registered for VAT, 21 per cent is added to the fee.
Bank escrow, also called a blocked, security or escrow account (vázaný, jistotní nebo úschovní účet), is a product offered by a particular bank. The price is usually calculated as a percentage of the amount, with a fixed minimum and maximum according to the bank's current price list. Some banks offer it only to clients who are taking out a mortgage with them. It tends to be less flexible where non-standard conditions are involved, and any change to the agreement usually incurs a further fee.
With all three options, the money is held in a bank account covered by statutory deposit insurance. The basic limit is EUR 100,000 per client per bank. For proceeds from the sale of residential property, you can apply for increased compensation of up to a further EUR 100,000, provided the money was credited no more than three months before the bank failed. This compensation must be claimed within two months of the reference date. For more expensive properties, therefore, the insurance will not cover the full amount, which is why it is worth checking which bank holds the escrow account.
Conditions for releasing the money: Land Registry entry, removal of the mortgage, handover of the property
The most important part of the escrow agreement is a precise description of the conditions for payment. These usually include:
- an extract from the Land Registry, or data obtained through remote access, showing the buyer registered as the owner with no restrictions other than those the buyer has agreed to (typically a mortgage in favour of the buyer's own bank),
- payment of part of the purchase price directly to the seller's bank to repay the seller's loan if the property is mortgaged, together with the bank's undertaking to issue consent to the removal of the mortgage (zástavní právo) from the register,
- handover of the property, evidenced by a handover protocol, or alternatively retention of a smaller part of the price until the property has been vacated and the keys handed over,
- a deadline by which the money will be returned to the buyer if the Land Registry rejects the registration or the transfer does not take place by a certain date.
A 'plomba' in the Land Registry (a flag showing that a change is pending) means only that proceedings are under way. You should therefore not make payment conditional on the flag alone, but only on the completed registration.
Escrow and mortgages: how the bank pays the loan into escrow
When the purchase is financed with a mortgage, the bank does not send the money to the seller but directly to the escrow account. The buyer usually deposits their own funds first, and the bank then pays the remainder. Before releasing the loan, the bank will generally ask the buyer for the signed purchase agreement and mortgage agreement (zástavní smlouva), the escrow agreement, proof that the buyer’s own funds have been deposited and often also confirmation that the application to register the mortgage (návrh na vklad zástavního práva) has been filed. Banks also require the escrow agreement to state that, if the transfer falls through, their money will be returned directly to them. Processing the drawdown can take several working days, so the timetable for the transfer must allow for this. Some banks have their own conditions for escrow held by a lawyer or notary, so it is advisable to agree the wording of the agreement with the mortgage lender in advance.
Paying from abroad: money laundering checks, source of funds and currency conversion
Under Act No. 253/2008 Coll., on Certain Measures against the Legitimisation of Proceeds of Crime, lawyers, notaries and banks are all obliged entities. They must therefore verify the client’s identity, identify the beneficial owner if the buyer is a company, and check where the money comes from. Have your documents ready, such as the contract for the sale of another property, proof of income, a tax return, an inheritance decision or a loan agreement. Politically exposed persons and payments from higher-risk countries are subject to enhanced due diligence. Always send money from an account held in your own name. Payments from third parties significantly delay the checks and may even lead to the escrow being refused.
In the Czech Republic, the purchase price is usually agreed in Czech crowns, and the escrow is held in Czech crowns as well. Between signing the agreement and making the payment, you therefore bear the exchange rate risk. You can fix the rate with your bank or with a specialist money transfer provider. When comparing offers, look not only at the rate but also at the fees charged by intermediary banks, which may reduce the amount credited. Any overpayment will be refunded by the escrow agent in accordance with the agreement. An international transfer may take several days. Escrow in euros is possible if the parties agree to it and the agreement clearly states who bears the cost of conversion.
Common mistakes in escrow agreements and how to avoid them
- Vague release conditions, for example the submission of proof of transfer without specifying what document is meant.
- No deadline or procedure for returning the money if the transfer does not go ahead.
- Inconsistencies between the purchase agreement, the escrow agreement and the mortgage lender’s conditions.
- Failure to state who owns the deposited funds, which matters for deposit insurance.
- Depositing money without confirmation that the escrow has been recorded in the Bar Association’s escrow register (kniha úschov), or into an account not designated as an escrow account.
- A change of account number communicated only by email. Always verify payment details by phone or in person — fraudulent emails are a common trick.
Summary for international buyers
If you are buying property in the Czech Republic for the first time, these basic rules apply. Do not send the purchase price to the seller but to the escrow agent: a lawyer, a notary or a bank. You become the owner only once you are entered in the Land Registry (katastr nemovitostí), which usually takes several weeks, and only then does the escrow agent release the money to the seller. Expect checks on the source of your funds, pay only from your own account and arrange the currency conversion in advance. Have the agreements translated or drawn up in bilingual form so that you understand the release conditions.
Frequently asked questions
Which type of escrow is the safest? None of the options is risky in itself; what matters is the quality of the agreement and verification of the escrow agent. With a lawyer, ask for confirmation from the escrow register; with a bank or a notary, check that you are paying into a genuine escrow account.
How long will the money stay in escrow? Usually for the duration of the registration proceedings, i.e. at least the twenty-day protective period plus the time needed for the entry to be made and for any further conditions to be met. In practice, this is most often several weeks.
Who pays for the escrow? The law does not specify this; it depends on what the parties agree. It is often paid by the buyer, and sometimes the costs are split equally. It is advisable to state this explicitly in the purchase agreement.
This article explains general principles. Before signing, have the wording of the agreements and any tax implications checked by a lawyer or tax adviser.
DALILE LIVING can help you prepare the entire transfer, coordinate with the lawyer, notary and mortgage lender, and handle the handover of the property.
Sources
- Česká advokátní komora – Advokátní úschovy
- ČÚZK – Návrh na zahájení řízení o povolení vkladu
- Garanční systém finančního trhu – Výše náhrady
- Vyhláška č. 196/2001 Sb., notářský tarif (zakonyprolidi.cz)
- Finanční analytický úřad – Právnické profese (povinné osoby)
- Investice.cz – Bezpečný převod peněz: bankovní úschova
- ČAK – Jak na bezpečné úschovy (2025)
