What is the difference between OV (osobní vlastnictví) and DV (družstevní vlastnictví) ownership in Czech Republic?
There are two main types of properties in the Czech Republic and you’ll find them on real estate listings as OV (osobní vlastnictví) and DV (družstevní vlastnictví). Basically, they can be translated as meaning Private Ownership and Cooperative Ownership, respectively.
The first point to clear up is that in the Czech Republic there’s no leasehold system such as exists in the UK. There is the occasional exception found in cottages where the town or state owns the land and the cottage owner leases the land from them. When the property changes hands, the lease contract is renewed.
Private ownership here has been most commonly found with stand alone homes but is now becoming more and more common in apartment buildings. New apartment buildings are almost always OV.
The benefit of buying OV is that both SRO and individuals can purchase them and banks are willing to give mortgages on them because they have collateral for money being lent.
These properties are slightly higher in price than DV properties because they are easier to finance.
Cooperative ownership has members and they have bought the rights to be a member and use a particular flat. The land registry doesn’t record the particular flat that the member lives in, just that he is in that building.
This type of ownership is virtually impossible for a foreigner to buy into. The memorandum of association (notarsky zapis) usually stipulates that membership is only available to Czech citizens. Often SROs and companies aren’t even allowed to become members.
These flats are usually a little cheaper than OV flats because banks are less eager to lend to prospective DV owners.
The benefit of buying into a cooperative is that there’s no waiting period for becoming the official owner of the flat, whereas when purchasing a privately owned flat, the process of becoming the recognized owner in the eyes of the land registry can take some time, although it has gotten much quicker recently.
There is the possibility of changing a DV flat to an OV, but it requires the cooperation and willingness of all members in the cooperative. Naturally, this process can be a painstakingly slow one. If even one member disagrees, it can cause real problems and drag out the process even longer.
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