Mar 27, 2024

Selling a Cooperative Apartment in the Czech Republic

Selling a cooperative apartment in the Czech Republic follows different rules compared to selling a personally-owned apartment.

But don’t worry—though it might seem like there’s more to navigate than selling a regular flat, it’s not a complex process. What do you need to arrange for a successful sale of a cooperative apartment?

How do cooperative apartments in the Czech Republic differ from individually-owned ones? The biggest distinction lies in the owner—while the ownership of a personally-owned flat is registered under a specific individual’s name, with a cooperative apartment, the housing cooperative is the owner, and you are a tenant of this cooperative with a membership share in it. This means that when selling, you have different rights and obligations compared to a “regular” apartment owner. So, how does the sale of a cooperative apartment in the Czech Republic work?

Notifying the cooperative

Since you’re not the owner of the cooperative apartment, you also need to involve the cooperative in the sale. Therefore, it’s advisable to consult the statutes to understand the conditions under which you can sell your membership share within the cooperative. Discuss your intention to sell with the cooperative and determine the conditions for transferring the share. These might involve restrictions on who can become a new member of the cooperative.

Also, request a confirmation of your membership in the cooperative and your debt-free status with the cooperative. The cooperative should also provide you with a document stating the remaining amount of the annuity, if you haven’t fully paid it yet. Prospective buyers will likely be interested in monthly charges and other fees payable to the cooperative.

Find out the fee that the cooperative charges for transferring a membership share and whether there’s a possibility of transferring a cooperative apartment into personal ownership.

What about the price?

Have you gathered all the necessary information for the share transfer? Fantastic! Now, you face several important steps. The first one is to determine the price at which you’ll sell your membership share in the cooperative. Unlike with apartment owners, apart from considering location, size, and nature of the apartment, you’ll also need to account for the fact that it’s a cooperative apartment. It might result in the price being slightly lower. What are the reasons for that?

Most importantly, a prospective buyer will be purchasing a membership share within the cooperative, not the apartment itself. This means that if they wish to rent out or renovate the apartment, they’ll have to first approach the cooperative, which must approve the rental or renovation. While this is often a formality, it’s an additional step to consider. An exception is when the cooperative is planning to convert membership shares into personal ownership in the very near future. In such a case, the value of a cooperative apartment equals that of an individually-owned one, as ownership is about to change.

Another reason cooperative apartments in the Czech Republic are slightly cheaper is because buyers of these apartments have somewhat limited financing options. When applying for a mortgage, they must use a different property as collateral (unlike personally-owned apartments, where the purchased property serves as collateral; this isn’t possible with cooperative apartments, as they remain under the ownership of the cooperative).

However, in other aspects, the price of a cooperative apartment in the Czech Republic is determined just like any other property—thus, it depends on the condition of the apartment, floor level, layout, and so on. While you can estimate the price yourself, it’s usually better to seek an expert’s valuation, typically from a real estate agency. In many cases, if you use their services to sell the apartment, you’ll get a property valuation for free. If you’re hesitant about using a real estate agency due to commission concerns, learn how the process is actually determined. Also, be aware of what to consider when drafting an exclusive contract with a real estate agency.

Advertisements, viewings… and the cooperative again

After determining the price at which you’ll sell your cooperative apartment in the Czech Republic—or rather, your membership share within the cooperative—it’s time to let everyone know that your apartment is up for sale. This involves sprucing up and photographing the apartment, creating an ad, and spreading the word. You’ll conduct viewings with potential buyers and then select a buyer.

Once you’ve chosen a suitable buyer and agreed on the price, it’s time for contract signings. Be sure to have a lawyer specializing in property involved. Unlike with individually-owned apartments, you won’t be drafting a standard sales contract; instead, it’s a membership share transfer agreement within the housing cooperative. This is followed by an escrow agreement, or other necessary documents as required.

Then, you simply deliver the membership share transfer agreement to the cooperative, which will then issue a rental agreement to the buyer. Unlike with selling personally-owned apartments, you don’t need to transfer the ownership of the apartment in the property register—ownership remains with the cooperative. As a result, the final phase of the sale is slightly faster and more convenient, as you don’t have to wait for the property register entry, which usually takes about a month.


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