Where a payment and a delivery cannot be made at the same moment, the money can be placed with a law firm instead of passing directly between the parties. The funds are held on a separate account and released only when the conditions the parties have agreed in writing are met.
How it works
- The buyer, the seller and our firm enter into a written escrow agreement setting out what is deposited, on what conditions it is released, and what happens if those conditions are not met
- The buyer transfers the funds to a separate account held for that purpose
- We confirm receipt to both parties
- Once the agreed conditions are documented — for example registration of a transfer in the Land Registry, or delivery of the goods — the funds are released to the seller
- If the conditions are not met within the agreed period, the funds are returned to the buyer
When it is used
Most often in property transactions, where the price is paid before the transfer is registered, and in transactions between parties who have not dealt with each other before, where neither wishes to perform first. It is also used for share transfers and for staged payments under a larger contract.
Our position
We act only on the terms of the escrow agreement. We do not decide who is entitled to the funds, and we cannot release them on the instruction of one party alone against the agreement. As an attorney we are bound by professional rules and by the duty of confidentiality, and client funds are kept separate from the firm’s own assets.
The terms of each escrow are agreed for the individual transaction. Please contact us with the outline of the transaction and we will tell you what the escrow can and cannot cover.
Free guide: Renting & buying a home in Czechia
Deposits, notice, escrow and the Land Registry. PDF, 2 pages.
Download the guide (PDF)