Practice Tip

We would still recommend undertaking a due diligence of the transferred real estate to avoid future discrepancies.

Material Publicity in the Czech Real Estate Register Restored

Effective from 1 January 2015, the principle of material publicity has been restored into the Czech real estate law. The new Civil Code (together with the new Real Estate Register Act) effective in the Czech Republic as of 1 January 2014 already introduced major legislative changes concerning real estate, however the effective date of some of these provisions has been postponed until 1 January 2015 in order to allow the alignment of the real estate factual and registered ownership status.

The new legislation strengthens the position of persons acting in good faith in relation to accuracy of information listed in the real estate register. Specifically, if the status registered in the register is not in accordance with the factual ownership, the person acquiring real estate property for a consideration and in good faith from the person registered as owner in the real estate register is generally recognized as the owner.

As a result, it is possible for an acquirer to acquire in good faith real estate for a consideration from a non-owner unless the rightful owner takes an action against the newly registered ownership status (i) within three years from the date of entry, or (ii) within one month after learning about the change of registered status; then the right to challenge the transfer shall expire. However, we would still recommend undertaking a due diligence of the transferred real estate to avoid future discrepancies.

Before 2015, the factual ownership status was superior to the status registered in the real estate register and it had not been possible to acquire a real estate from a non-owner. This principle weakened the position of the real estate register as a reliable source of information relating to real estate rights.

Hence, the recodification aims to bring to the Czech real estate law restoration of time-proven land registration principles enabling better protection of property rights and restoring the credibility of information listed in the real estate register.