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Relying only on the registration in the Cadastral Registry constitutes a high risk.
New decision shows importance of checking how a seller obtained a property.
The Supreme Court (SC) has recently ruled that a person acquiring real estate (C) cannot become its owner if he acquires it via sale and purchase agreement from a person (B) who acquired it on the basis of a null and void agreement. According to the SC, this conclusion applies despite the fact that person C believed that person B is the proper owner of the real estate – typically on the basis of data included in the Cadastral Registry.
Within the court proceedings, person C supported its position using the rationale of a decision of the Constitutional Court (CC). In relation to a similar arrangement (i.e., transfer of real estate from A to B and after that to C), the CC had ruled that the subsequent withdrawal of A from the sale and the purchase contract with B had no impact on the ownership of C. However, the SC did not identify with this reasoning and decided that person C is not an owner despite his potential good faith.
Therefore, if acquiring Czech real estate, it is necessary to verify the validity of the legal title of the previous owner. There is a high risk in relying only on data included in the Cadastral Registry, according to which the seller is the owner of the respective real estate.
Updated/Aktualizováno: July 22, 2014,
Here is another article which deals on the same subject and gives a scenario involving the Joint Property of Spouses (SJM) law in Czech Republic. A very possible situation which would negate a transaction: http://bit.ly/hOtUDr. Further emphasis for a good legal team on the ground for you.