Escrow of the purchase price: how the money is protected
Where does the money sit between the signing of the purchase agreement (kupní smlouva) and the entry of ownership in the Land Registry (katastr nemovitostí), when attorney escrow (advokátní úschova) of the purchase price has been agreed? In a special account, from which it is to be released against the documents listed in the escrow agreement (smlouva o úschově) — and what decides is how precisely they are listed. This text goes through those sentences: what they must say, what escrow costs and where its protection ends.
The problem escrow solves
The seller does not want to transfer ownership before having the money. The buyer does not want to pay before being the owner. Both are reasonable, and both cannot be satisfied at once: ownership arises only on entry in the Land Registry, and registration proceedings (vkladové řízení) take weeks — according to the Czech Office for Surveying, Mapping and Cadastre (Český úřad zeměměřický a katastrální, ČÚZK), the average time to complete a registration in August 2026 was 22 days nationwide, and registration cannot be approved before the 20-day protective period (ochranná lhůta) has elapsed under § 18 of Act No. 256/2013 Coll., on the Land Registry (katastrální zákon).
Escrow bridges that period. The money leaves the buyer straight after signing, but reaches the seller only at the moment the buyer is registered as the owner. That moment is not a feeling or a phone call — it is a document that the escrow agent (schovatel), the attorney or notary holding the money, places next to the escrow agreement and compares. One place in that agreement works like the title block (popisové pole) on a drawing: the release condition (výplatní podmínka). The document is read according to it and performed according to it.
Attorney escrow of the purchase price: account, escrow register, guarantee fund
It rests on three safeguards that can be checked before the money leaves.
Special account. The funds must not sit in the law firm’s operating account. They are held in a special account designated as attorney escrow, and the rule one account = one escrow applies. In practice: the number you are given must not match the number on the invoice for legal services.
Electronic Escrow Register. Since 1 January 2026, an attorney must notify the escrow in the Electronic Escrow Register (Elektronická kniha úschov) of the Czech Bar Association (Česká advokátní komora, ČAK) before the money is received into the account; the report covers the depositor (složitel), the beneficiary (oprávněný), the account number and, later, the dates of receipt and payout. What matters is the order: first the entry, then the money. So ask for the confirmation of registration and compare the account number in it with the number in the agreement. According to the Bar, the client receives it directly from the Electronic Escrow Register before depositing the money; until it arrives, do not deposit the money and contact the attorney or, if need be, the Bar.
Guarantee fund. Since 1 January 2026, the ČAK Guarantee Fund (Garanční fond ČAK) has been in operation; it pays for damage caused by an attorney’s criminal activity in connection with escrow, typically embezzlement (zpronevěra). Compensation is limited: at most CZK 2,500,000 per escrow and CZK 5,000,000 where it concerns the purchase price from the sale of immovable property used for housing. It is a cap, not full cover.
Notarial escrow: a protocol instead of an agreement
Notarial escrow (notářská úschova) of money is not concluded by an agreement but recorded in a protocol (protokol o úschově) under § 86 et seq. of Act No. 358/1992 Coll., the Notarial Code (notářský řád). The protocol states the notary and the special account, details of the depositor and the recipient, the amount and the conditions on which the money will be released; it is released exclusively by cashless transfer.
In practice, three differences show. The fee is set by decree, not by agreement. Notaries are appointed to a seat and their number is limited, so the choice of escrow agent is narrower. And the protocol is formalised: what does not belong in it will not be in it. Cash neither goes into escrow nor comes out of it — besides the form of payout, this also follows from the limit of CZK 270,000 per day for cash payments under Act No. 254/2004 Coll.
What escrow costs
With a notary, the fee is calculated in bands from the amount held in escrow, under the notarial tariff (notářský tarif), Decree No. 196/2001 Coll. A model 4+kk flat (four rooms plus a kitchenette) with an area of 85 m² in Bubeneč, purchase price CZK 14,500,000:
| Tariff value band | Rate | Base | Fee |
|---|---|---|---|
| first CZK 100,000 | 1.2 % | CZK 100,000 | CZK 1,200 |
| up to CZK 500,000 | 0.6 % | CZK 400,000 | CZK 2,400 |
| up to CZK 1,000,000 | 0.4 % | CZK 500,000 | CZK 2,000 |
| up to CZK 10,000,000 | 0.2 % | CZK 9,000,000 | CZK 18,000 |
| up to CZK 30,000,000 | 0.1 % | CZK 4,500,000 | CZK 4,500 |
| Total | CZK 28,100 excl. VAT |
Including 21 % VAT, it comes to CZK 34,001. The tariff, however, has a rule worth knowing: if the notary accepts money into escrow in connection with a notarial deed (notářský zápis) of a legal act that the notary personally drew up, the notary is entitled to only one tenth of the escrow fee, i.e. CZK 2,810 excl. VAT. The difference of CZK 25,290 is why we ask a notary about drafting and escrow together, not one after the other. The condition is a notarial deed: for a purchase agreement that the notary draws up only as a private document (soukromá listina), the tariff provides for no reduction.
The attorney’s fee (odměna advokáta) for escrow is always contractual and is not governed by the attorney tariff (advokátní tarif), so its amount needs to be agreed in advance and stated in the escrow agreement. Since 2026, there is also the contribution to the Guarantee Fund: the attorney pays CZK 500 for each escrow reported to the Electronic Escrow Register, and that amount may be reflected in the price.
The release condition: the sentence everything hangs on
“The money will be paid out after registration of ownership” is insufficient wording. It does not say what proves the registration, who obtains the proof, or what state the title deed (list vlastnictví) should be in. A usable condition names the document and what must and must not appear on it:
- an extract from the Land Registry (výpis z katastru nemovitostí) no older than the agreed number of days (three days in the model wording),
- in Part A, the buyer is registered as the owner, in the share under the purchase agreement,
- in Part C, no lien (zástavní právo) in favour of a third party is registered,
- in Part D, there is no note on the commencement of enforcement proceedings (exekuce) or insolvency proceedings (insolvenční řízení).
Paying out against the decision approving registration (rozhodnutí o povolení vkladu) is weaker than paying out against an extract: if the office grants the application in full, no written decision is issued and the parties receive only a notification of completed registration (vyrozumění o provedeném vkladu) — § 18(2) and (3) of Act No. 256/2013 Coll. The condition must also say who obtains the extract and to whom it is delivered, otherwise each side waits for the other; we tie this to the escrow agent, and the time limit runs from the moment the agent has the extract.
The same section contains the payout schedule: to whom, how much, to which account — with the account numbers in the text, not in an email. The sum of the partial amounts must equal the amount in escrow to the last koruna; we check this by adding up, not by eye. What follows after the payout is described in the text on what the purchase agreement and registration in the Land Registry involve.
The seller’s lien: partial payout and its order
If the flat is encumbered by a lien of the seller, its deletion (výmaz) is dealt with in the same registration proceedings and the escrow is split: the part of the price corresponding to the secured claim goes directly to the lien creditor (zástavní věřitel), the rest to the seller.
Three extra things belong in the agreement. The exact amount according to the lien creditor’s confirmation, stating the date as at which it applies. The account number and payment reference (variabilní symbol) for this single payment. And a rule for the case where the amount changes by the payout date — this is the one most often forgotten, because the confirmation has limited validity. Good wording therefore states not just a figure, but also that the confirmation current as at the payout date is used, and that any difference is topped up from, or returned to, the part intended for the seller. The confirmation that the claim has been extinguished and the consent to deletion should be to hand even before the application for registration (návrh na vklad) is filed.
When registration is not approved: the return branch
The agreement must also describe the other end. If registration is not approved — the application is rejected, the proceedings are discontinued, or the condition is not met by the agreed date — the money is returned to the buyer, to the account stated in the text.
Three details decide. The date: the return branch is tied to a specific day (“if the condition is not met by 31 March 2027”), not to a reasonable period. The proof: what the escrow agent needs in order to return the money — usually the decision rejecting the application, or an extract on which the buyer is not registered. And unilaterality: the money should be returned without the seller’s consent, otherwise the other side can hold on to the payout as leverage.
Where our approach has a weak spot
We tie the payout to the extract from the Land Registry, not to the decision approving registration. That is safer for the buyer and worse for the seller: between registration and payout, the agreed time limit for payout is still running, and during it the seller is already a former owner without the money. We say this openly in negotiations, because it is a genuine disadvantage, not a formality.
The second weak spot does not concern only us. The Guarantee Fund covers at most CZK 5,000,000 for the purchase price from the sale of a property used for housing. For the model flat at CZK 14,500,000, CZK 9,500,000 remains above the cap. Escrow with an attorney has been better protected since 2026 than ever before, but protected does not mean insured up to the full amount.
And the third point: we recommend the escrow agent, but we do not vouch for them. The choice is approved by both parties.
Annex: checklist of escrow agreement conditions
We go through the list before signing, item by item. For each item, we state what is missing if the agreement does not contain it.
- Identification of the escrow agent and the escrow account number directly in the text. Without it: the number arrives by email, which can be forged.
- A declaration that it is a special account kept only for this escrow. Without it: the money sits among other people’s funds.
- Confirmation of registration in the Electronic Escrow Register before the amount is deposited. Without it: there is no proof that the escrow came into existence before the payment.
- The exact amount and the day by which it is to be deposited. Without it: everyone counts “without undue delay” differently.
- A release condition naming the document and the state of Parts A, C and D of the title deed. Without it: a dispute over what “after registration” means.
- Who obtains the extract and to whom it is delivered. Without it: the parties wait for each other.
- Payout schedule: recipient, amount, account, payment reference; the total equals the escrow. Without it: the payout is delayed by haggling.
- A rule for the partial payout to the lien creditor, including a change in the amount as at the payout date. Without it: the top-up is dealt with outside escrow.
- Time limit for payout in working days from fulfilment of the condition. Without it: an indefinite period.
- Return branch: date, proof and payout without the other party’s consent. Without it: the money is returned only with the other side’s permission.
- Interest and fees: to whom they belong and who pays them. Without it: they are deducted from the principal.
- A ban on unilateral changes to the instruction; changes only by an amendment signed by both parties. Without it: the instruction can be changed by a phone call.
Frequently asked questions
How much does escrow of money cost when buying a property? With a notary, according to the decree: on CZK 14,500,000 it comes to CZK 28,100 excl. VAT, and one tenth of that if the same notary also drew up the agreement as a notarial deed. With an attorney, the fee is always contractual and is not governed by the attorney tariff, so make sure you know it before signing the escrow agreement.
Is notarial escrow safer than attorney escrow? It is secured differently, not automatically more safely. Notarial escrow rests on a formalised protocol and a fixed rate; attorney escrow, since 2026, on the Electronic Escrow Register and the Guarantee Fund with a limit of CZK 2,500,000, or CZK 5,000,000 for housing. The outcome depends more on the wording of the release condition than on the type of escrow agent.
When is the money released from escrow to the seller? Once the condition in the agreement is met — in our case, once an extract is provided on which the buyer is registered as the owner. According to ČÚZK, the average time to complete a registration in August 2026 was 22 days nationwide; the payout then follows within the time limit that the agreement sets in working days from the provision of the extract.
Does there have to be escrow, or is it enough to pay the seller directly? It does not have to be. But direct payment means that one side performs first, without any security. A different situation is instalments under a construction schedule (harmonogram projektu) — these are described in the text on how buying a flat from a developer works.
Key takeaways
Escrow does not protect money by existing, but by how the release condition is written in it. Three things decide: against which document the money is released, who obtains that document, and what happens if registration is not approved. The numbers worth remembering are the 20 days of the protective period, the 22 days of the average time to complete a registration according to ČÚZK (August 2026) and the Guarantee Fund cap of CZK 5,000,000 for housing — at Prague prices, the last of these is the least pleasant. We read the escrow agreement alongside the purchase agreement and alongside the payout schedule, because the error is almost always found in the difference between them.