Finances play an important role when buying or selling a property, but unfortunately they can also become a source of problems. The owner of the property wants to make sure that he or she gets paid, and the buyer wants to make sure that the property is really theirs. How to get out of it? Use a notary’s escrow.
What is notarial custody for?
The notarial escrow serves as a kind of insurance when selling the property. When you sell or buy a property, be sure to back everything up with a contract and get the necessary stamps. But it doesn’t stop there, there are still finances to consider.
Who would give such a large sum of money out of hand when they are not even listed as the owner of the property yet? And who would let a buyer register a property if they are not sure they will actually pay for it? To make sure everything goes without complications and unnecessary worries, there is notary escrow.
When to use notarial custody?
Whether you are selling or buying a property, and you want to be sure that everything will be done to the satisfaction of both parties, use notary escrow. The notary will take custody of the funds and only release them to the seller when all the conditions in the contract have been met. If this does not happen or if they are violated, the notary will return the funds to the buyer.
An important part of the notarial escrow is the protocol of receipt of money into notarial escrow, which must include:
- What account number has been assigned to the case
- Date on which the money was handed over
- The location where the money was handed over
- Date of the purchase contract
- Terms and conditions of possible disposal of the funds
- Bank account numbers of both parties
- Further instructions regarding the failure to transfer the money
What about the cost of the notary’s custody?
The notary’s remuneration for depositing funds is regulated by Decree 196/2001 Coll. on remuneration and compensation of notaries, administrators of estates and the Notary Chamber of the Czech Republic and is based on the purchase price, which in this case is referred to as the tariff value.
- 1.2% of the first 100 000 CZK of the tariff value
- The remuneration is 0.6% of the excess amount up to CZK 500,000 of the tariff value,
- On the excess amount up to CZK 1 000 000 of the tariff value, the remuneration is 0.4%,
- 0.2% of the excess amount up to CZK 10 000 000 of the tariff value,
- 0.1% of the excess amount up to CZK 30 000 000 of the tariff value, with a minimum of CZK 1 000.
- The amount above CZK 30 000 000 shall not be included in the base of the tariff value.