Illegal extensions and house buyout: how they affect the offer and price

What counts as illegal construction

Illegal (in practice, "black-market") construction means any building or part thereof created without the required permit or notification, or in breach of one. Rules are set out in the Building Act No. 283/2021. The most common scenarios are:

• An extension, superstructure, or loft conversion built without permission,
• Change of use (for example, converting a cellar or garage into living space),
• A structure larger or differently positioned than the original permit allowed,
• A building partly signed off at completion but occupied in full.

Illegal construction need not be recent. An older extension from earlier years can be equally problematic if no documentation ever existed. However, a distinction applies: older buildings are assessed under rules that existed when they were built, and legality can sometimes be proved with documents from the building authority's archives.

Under the Czech Civil Code § 89/2012, an extension is part of the building (§ 506). When you sell the house, the extension is sold with it. You cannot exclude it from the sale, and the buyer acquires the building as it physically stands.

Identifying the discrepancy: Czech Land Registry versus actual state

The Czech Land Registry (katastr nemovitostí) records buildings based on documents submitted to it. Records do not necessarily reflect reality. Three common scenarios arise:

• An extension is registered in the Land Registry but has no permit. Registration alone does not guarantee legality.
• An extension is missing from the Land Registry. The floor plan in the map does not match what actually exists.
• The house has a different use or category than registered.

Assessment involves comparing four sources: the Land Registry extract and cadastral map (publicly available in our guide to the Czech Land Registry), building authority documentation and decisions, completion certificates, and the actual physical state seen during a viewing. Discrepancies usually appear when comparing the map floor plan with what actually exists.

We recommend that owners first gather what they can find: building permits, completion certificates, designs, or notifications. Even incomplete records make our job much easier.

Legal consequences for the owner

Under the Building Act No. 283/2021, the building authority may initiate proceedings to determine whether illegal construction can be subsequently authorised or whether removal must be ordered. The course of action depends on the specific structure, its location, and compliance with local planning rules. For this reason, no one can predict the outcome in advance, and any serious party will not promise one.

For the sale itself, these points matter:

• Ownership does not become problematic through sale. Illegal construction does not prevent the transfer of ownership, but the new owner bears the resulting risk.
• Seller's liability. The Czech Civil Code § 89/2012 (§ 1914 onwards) governs buyer rights for defective performance. Concealing a known problem can expose the seller to claims, which is why all facts are disclosed in the purchase contract.
• Enforcement does not stop with a change of owner. Any authority proceedings will not be suspended simply because the house has been sold.

Always assess your specific situation with a lawyer. As part of our legal service for house buyouts, we draft the contract so that the building's condition is clearly described and both parties know what they are purchasing.

How this affects valuation and the offer

The price of a house with an illegal extension is not usually assessed as the price of the house plus the extension. The buyer must account for several items that we would itemise in the offer:

1. The value of the house without the disputed part, that is, what is clearly unproblematic.
2. The benefit of the extension, if it can be subsequently legalised. If not, its value may be near zero.
3. Costs of legalisation: design documentation, survey, administrative procedure, possible structural adjustments.
4. Costs of removal, if removal becomes likely.
5. Time and uncertainty involved in resolution and outcome.

This is why two similar properties may differ in price. An extension that can be subsequently authorised on your own land and complies with local planning rules will reduce price far less than one that encroaches on a neighbour's land or enters a restricted zone.

Valuation methods and the influence of condition are explained in our article on property valuation. You will receive a written offer within 24 hours with a detailed calculation breakdown, so you see exactly how the problematic part affects it. The offer is non-binding, and you can withdraw before signing the contract.

The buyout process for a house with illegal construction

The process differs little from a standard buyout, except that initial openness is more important. The complete process is described on the How it works page; for a house with illegal construction, expect this:

• Initial information. Tell us what you know about the extension, when it was built, and what documents exist. Verification and a viewing will normally reveal any discrepancy anyway.
• Assessment and offer. A written offer with a detailed breakdown arrives within 24 hours of receiving the details.
• Purchase contract. The building's condition is explicitly stated in it. A deposit of up to 1,000,000 CZK is paid upon signature.
• Lawyer's escrow. Payment occurs by bank transfer through lawyer's escrow; legal service is included at no extra cost.
• Land Registry registration. Ownership passes only with registration. Under the Land Registry Act No. 256/2013, the Land Registry (katastrální úřad) cannot decide before 20 days have passed since notice to the owner; the average registration time is about 22 days.

If the extension is not registered in the Land Registry, expect that its status will need separate resolution and may prolong the process. We will agree the procedure in the contract beforehand.

Realistic expectations and what you can do

Owners should not expect a price as if the extension were in perfect order. At the same time, a quick direct buyout makes sense precisely when you don't wish to pursue legalisation, obtain permits, and deal with authorities. Price reflects the risk and effort the buyer takes on.

Before deciding, consider:

• whether legalisation is worth your time and money, or whether selling the house in its current state is more practical,
• whether you have access to documents that would legalise the work or show its older origin,
• the difference between an offer for the house "as is" and a possible price after resolution, and how much time you are willing to invest,
• tax implications of the sale, which depend on how long you owned the property and whether you lived in it (Tax Code § 586/1992); check the specifics with the Tax Authority or a tax adviser.

For guidance, you can request an offer for house buyout and compare it with your own estimate. The more truthfully you describe the property, the more accurate the result and the fewer surprises when signing.