The term “real estate” includes both tangible and intangible things (i.e., rights), as follows:

• Land plots
• Underground structures (if designated for a specific purpose)
• Rights in rem to the above
• Other rights stipulated by law, e.g., construction rights (temporary right granted to constructor to build and own real estate on third party land).

The Civil Code also specifically designates apartment units as part of real estate. All other assets, unless explicitly provided for otherwise by a special legal regulation, are not considered real estate under Czech law.

Real property law is governed, in particular, by the following legal regulations:

• Act No. 89/2012 Coll., the Civil Code
• Act No. 256/2013 Coll., on the cadastral register

Other legal regulations may also be involved, such as the restitution laws adopted to relieve wrongdoing connected in particular with the confiscation of real properties by the former socialist regime.

The Czech Republic maintains a uniform registration system, the cadastral register (katastr nemovitostí), centrally administered by the Czech Office for Surveying, Mapping and Cadastre. The cadastral register is a collection of data on real estate in the Czech Republic, which comprises both factual (list, description and spatial determination of the real estate) and legal information (registry of ownership, other registered rights to real estate and other status information pursuant to applicable legal regulations). The cadastral register enables public access to information, e.g., to verify the ownership title and other rights to the real estate registered therein.

Title registration is managed by a competent cadastral office. Competence is determined by the location of the real estate in question within a specific cadastral area. There are currently 14 cadastral offices in the Czech Republic. Each cadastral office operates multiple subordinated cadastral workplaces.

The cadastral register comprises the following items:

• Land plots
• Constructions, unless they are already forming part of the land plot or of the construction right (see “What is included in the term “real estate”?”)
• Apartment units

As noted above, the cadastral register is a public record of certain rights to real property including the following:

• Ownership right
• Mortgage right
• Right corresponding to an easement
• Lease
• Pre-emptive purchase right with effects of right in rem
• Construction right (see “What is included in the term “real estate”?”)
• Other rights if stipulated by law

The Civil Code has introduced the possibility to register leases in the cadastral register upon the request of the owner of the real property or upon the tenant’s request, provided that the owner has expressed his or her consent.

In general, ownership over real property is proved by an excerpt from the cadastral register (ownership deed or ownership folio), where the current owner is indicated.

Under previous laws, cadastral registry entries did not constitute a definitive or conclusive proof of ownership. A person relying on entries made after 1993 was only deemed, as a matter of law, to be relying on good faith that the registration corresponds to the factual state, unless such person must have been aware that it does not so correspond. As a consequence, a particular entry only established the good faith of the person holding a real property. If real property was held in good faith for a period of 10 years, the holder would become the owner of the real property on the basis of usucaption/prescription. Thus, legal titles regarding acquisition or transfer of real estate performed during the past 10 years were often required for legal inspection by prospective acquirers of real estate to mitigate the risk that such acquirer would not become the entitled owner of the real estate in question.

Currently, pursuant to the Civil Code, as soon as the title to real estate is entered into a public (cadastral) register, it is presumed that it corresponds to the actual situation of the property. Should the title entered into the register not correspond to the actual situation, the acquirer’s good faith in acquiring ownership title for consideration from a person entitled to transfer it according to the cadastral register entry (at the moment of filing of the registration application) will be decisive. As a consequence, the acquirer of the real estate may become the entitled owner thereof even if it the real estate was acquired from a person who was (in terms of the law) not the entitled owner thereof but was registered in the cadastral register. With regard to the rights entered into the cadastral register before the Civil Code entered into legal effect or within the first year thereafter, the abovementioned consequences will only arise one year after its entry into legal effect.

Should there be a discrepancy between an entry in the cadastral register and the actual situation, the affected person is entitled to ask for such entry to be corrected accordingly. However, such entitlement is limited in terms of time expired from performance of the relevant entry in the cadastral register.

Yes. All registered entries are publicly available, and information about the ownership of real estate can be searched online at www.cuzk.cz.

Basic information on real estate (i.e., information on the owners, way of protection of real estate, limitation of the ownership right and eventually other basic information) are available for free. A complete excerpt from the cadastral register may be obtained for a limited fee.

Electronic searches of real estate-related documents, comprised in a so-called collection of documents, which forms an integral part of a cadastral register, are possible, but some older documents may not be available. If this is the case, an interested entity can file an online request to make the respective document available electronically.

No nationality restrictions are currently in place with regard to the acquisition of real estate located in the Czech Republic.

Yes. Expropriation is allowed under Czech law. Nevertheless, according to the constitutional provisions, such expropriation or forced restriction of ownership right may be performed only if it is in the public interest, on the basis of a law and for compensation.

An interest may be held by any of the following:

• Freehold
• Ideal joint co-ownership
• Accessorial co-ownership
• Joint ownership of spouses

Accessorial co-ownership relates to instances in which a group of individually owned properties is interrelated by means of their location and purpose; the “shared” real estate which enables the use of the individual properties is held in accessorial co-ownership (e.g., access roads or parking lots). If the subject of the accessorial co-ownership serves the purpose of common use of land plots, the shares in the accessorial co-ownership are determined on a pro-rata basis according to the surface area of the individually owned land plots. Additionally, the share in accessorial co-ownership may only be transferred together with the ownership right to the item the use of which it enables.

Real estate is usually owned by commercial corporations (in particular by limited liability companies) or by individuals (through an exclusive ownership or an ideal co-ownership or an accessorial co-ownership or joint co-ownership of spouses). Special purpose limited liability companies or joint stock companies are usually used as entities to hold real property in commercial investment transactions and investment is very often made by means of acquisition of shareholding interest in such companies, subject to appropriate tax structuring.

Most real estate transactions are financed through institutional lenders such as banks or real estate funds. Consistent with other markets, expectations of institutional lenders active on the Czech market in relation to the debt equity ratio have shifted toward an increased portion of equity required to be invested by the investor.

The seller usually prepares the initial draft of the purchase agreement and related documentation.

Yes. A liability that occurred prior to acquisition can pass on to new owners or occupiers of real estate.

“Inheritance” of liability by an owner or a tenant of land is not excluded in connection with the environmental liability stipulated by special legal regulations. However, since the principle of “the polluter pays” is generally applied in relation to environmental pollution control, such situation is more of an exception than a general rule. An owner or a tenant may be held liable for pollution he or she did not cause, particularly in such case where the polluter who caused the contamination may not be found or does not exist anymore. This is typically the case with older industrial sites which were used prior to the year 1989. The liability for the so-called historical environmental burden (stará ekologická zátěž) usually passes to the new owner. Information on contaminated sites is publicly available at https://www.sekm.cz/portal/.

In addition, under Czech law, leases generally pass on to new owners of real estate; consequently, a lease granted by a predecessor of a new owner will be binding upon the new owner.

Yes. Sellers or occupiers generally retain such liabilities.

In general, no entity held liable for damage it caused is allowed to dispose of its liability, unless special conditions stipulated by applicable legislation are met. This general rule is also applied in the case of disposition of real estate by its owner or by the tenant and is especially important in the area of environmental pollution control (please see response to "Can an owner or occupier inherit liability for matters relating to the real estate even if they occurred before the real estate was bought or occupied?").