Insurance risk in property purchase: who bears responsibility from signature to registration in the Land Registry

Who is the owner between signing and registration

Between signing the purchase agreement and registration in the Land Registry, the seller remains the owner. Ownership of a property is acquired by entry into a public register, namely the Czech Land Registry (Czech Civil Code, Act No. 89/2012 Coll., section 1105).

An application for registration is filed after the contract is signed. The Land Registry Office cannot decide earlier than 20 days after the owner is notified (Land Registry Act No. 256/2013 Coll.), and the average registration time is approximately 22 days. The legal effects of registration then apply retroactively to the day the application was received by the Land Registry Office. However, this does not change the fact that during the proceedings, the property remains in your ownership and typically in your care.

For more details on registrations, see the guide to the Czech Land Registry.

When the risk of damage passes to the buyer

The risk of damage to the property generally passes to the buyer upon taking possession, not by signing alone. This is governed by section 2121 of the Czech Civil Code, Act No. 89/2012 Coll.: the buyer bears the risk of damage from the moment they take possession of the property, or if the seller allows them to use it and they do not take possession.

In practice, this means two things:

• If you hand over the keys and the buyer only actually takes possession after registration and payment, the seller bears the risk of damage until then.
• If the contract specifies earlier handover, the risk may transfer before the buyer acquires ownership. You need to know this before signing and have it clearly set out in writing.

The contract may deviate from the statutory rules, so it is important to read the handover provisions carefully. As part of our legal services, we will explain the contract to you and review it.

Who will insure the property and what to do with the policy

Until registration, the seller should maintain the insurance as they are the owner. Therefore, do not terminate or let expire the insurance policy on your property before the sale is completed.

1. Check that the policy is valid and the premium has been paid.
2. Inform the insurer that you are selling the property. Ask how the insurance will be handled after the change of owner.
3. Agree with the buyer whether they will insure the property themselves from the date of handover, and record this in the contract.
4. End the insurance only after registration and payment of the purchase price.

Property insurance is not a compulsory service, but during the period when the property is being sold, it provides simple protection for both parties. How the insurance behaves when the owner changes depends on the specific insurance policy and the insurer's terms, so it is advisable to verify this directly with them.

Specific scenarios: fire, theft, damage

When damage occurs before registration, the solution depends on whether the buyer has already taken possession and what the contract says. In all cases, notify the insurer and the other party immediately.

Documentation is essential: photographs, condition report and the date the event occurred. Insurance benefits may be tied to the property owner, so any reallocation or assignment of insurance rights should be set out in writing. No specific sum or procedure can be promised without review of the particular contract.

The role of lawyer's escrow

Lawyer's escrow protects both parties by ensuring that the purchase price is paid only after the agreed conditions are met. Funds do not move in cash or on trust. Cash payments are also limited to 270,000 CZK per day (Act No. 254/2004 Coll.), so reputable purchases are handled non-cash.

When buying from us, lawyer's escrow and legal services are included in the price, with no additional fees. A deposit of up to 1,000,000 CZK upon signing the purchase agreement is part of the agreed procedure, and the lawyer will explain how it is secured before you sign. If damage occurs during the registration process, both parties will be clear about the conditions under which funds are released or returned. The entire process is described on the page How property purchase works.

How to manage the risk in advance

Most issues can be resolved by a few clauses in the contract and some practical measures.

• Record the time of handover and transfer of risk of damage in the contract.
• Agree what happens if the property is destroyed or substantially damaged before handover (price adjustment, withdrawal).
• Take photographs documenting the condition on the day of signing.
• Do not disconnect the main utilities and security of the property until after handover.
• Keep the insurance policy and proof of premium payment.

You can refuse a non-binding offer and withdraw from the transaction before signing the contract, so you can carefully consider the terms. This is also related to how the purchase process works in practice.

What to do now

Prepare your insurance policy and basic documents and request a non-binding offer. You will receive a written offer with a breakdown of the valuation within 24 hours, or 48 hours for multi-unit buildings where income valuation applies.

1. Find your insurance policy and verify that it is valid.
2. Prepare your title deed, details of the property and a list of any defects.
3. Write down your questions about handover and transfer of risk.
4. Fill in the form below the article and you will receive a non-binding offer or valuation through it.

We buy properties throughout the Czech Republic and nothing commits you to anything.