Before You Pay a Reservation Deposit: What Buyers Should Check in Prague
In Prague, the biggest risk for buyers usually appears before the purchase contract — at the reservation stage.
Reservation deposits are paid early, deadlines are short, and pressure is common.
Once the deposit is paid, your leverage drops sharply.
This guide focuses on timing, risk, and verification — so you know what to check before you commit.
What a Reservation Deposit Really Means
A reservation deposit is not a formality.
It is a binding commitment under Czech practice.
In most cases:
- The deposit is non-refundable
- Deadlines are fixed in advance
- Financing delays are not accepted as excuses
This is why preparation must happen before, not after, signing.
Buyer Checklist: What to Verify Before Paying Any Deposit
Below is a practical pre-reservation checklist.
Most of these points are discovered too late — after the deposit is already at risk.
- Ownership Type (Personal vs. Cooperative)
Confirm whether the property is in:
- Personal ownership (osobní vlastnictví), or
- Cooperative ownership (družstvo)
Cooperative flats follow different rules, financing options, and transfer timelines.
Many banks will not finance them at all.
- Who Must Legally Sign
Verify:
- All registered owners
- Co-owners and percentage shares
- Spousal consent (SJM)
If someone cannot sign on time, the transaction stalls — but deadlines remain.
- Land Registry Entries (Liens & Restrictions)
Check the Land Registry (List vlastnictví) for:
- Mortgages and liens
- Easements (rights of way, usage limits)
- Enforcement or insolvency notes
Do not assume “it will be cleared later.”
Later is often after your deposit is locked.
- Existing Mortgages on the Property
Confirm:
- Exact outstanding mortgage balance
- Bank consent requirements for sale
- Time needed to issue payoff confirmation
Mortgage releases take time — and delays are common.
- Reservation Deadline to Purchase Contract
Reservation agreements usually set:
- Fixed deadlines (often 30–60 days)
- Penalties for delay
- No flexibility for financing issues
Ask clearly:
What happens if we are not ready on time?
- Financing Approval Status (Not Just a “Promise”)
For Czech and foreign buyers alike:
- Pre-approval is not final approval
- Banks reassess after reservation
- Additional documents are often requested
For foreign buyers, approval often takes longer depending on:
- Legal status in CZ
- Residency history
- Income source and currency
- Financing Compatibility With Deadlines
Confirm whether your bank can:
- Approve financing within the reservation timeline
- Release funds on time
- Coordinate with escrow conditions
If the answer is “probably,” the risk is on you — not the seller.
- Reservation Deposit Refund Conditions
Read carefully:
- When the deposit is refundable
- When it is partially refundable
- When it is fully lost
Most deposits are lost if the buyer fails to perform — even for reasons outside their control.
- Escrow Structure (How Money Moves)
Verify:
- Who holds the funds (lawyer, notary, bank)
- When funds are released
- What conditions must be met
If payment flow cannot be explained clearly, the setup is not safe.
- SVJ (Homeowners’ Association) Obligations
Check with the SVJ:
- Outstanding debts
- Planned renovations
- Monthly contribution levels
- Ongoing disputes
Buyers inherit these obligations automatically.
- Technical & Legal Modifications
Confirm whether:
- Layout changes were approved
- Load-bearing walls were altered
- Utilities were modified legally
Unauthorized changes can block financing or delay contracts.
- Energy Performance Certificate (PENB)
Verify:
- Valid PENB exists, or
- Legal substitute is provided
Missing PENB causes delays and buyer uncertainty.
- Tax & Fee Awareness
Clarify early:
- Property acquisition tax (if applicable)
- Legal fees
- Escrow costs
- Bank fees
Unexpected costs often appear after reservation.
- Your Own Availability
Ask yourself:
- Can you sign documents quickly?
- Are you traveling?
- Are translations needed?
Time zones and availability matter more than buyers expect.
A Calm but Important Reminder
In Prague, properties move fast — but mistakes move faster.
Most buyers don’t lose deposits because they were careless.
They lose them because they assumed checks could wait.
They usually can’t.
Before You Commit
If you are considering a reservation deposit — or already feel pressure to pay one:
🔴 Book a Free 15-Minute Buyer Consultation
⚪ Request a Buying Plan + Mortgage Readiness Call
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