Attorney Escrow for Property Transfers in the Czech Republic: When Is Your Transaction Truly Safe?

The Electronic Book of Escrows and the Guarantee Fund

To ensure maximum protection of client funds, professional regulations and the Czech Act on the Legal Profession have recently undergone significant amendments, taking the transparency of escrows to a new level.

For each individual escrow, the attorney must use a separate bank account, which does not and will not hold any other funds than those related to the specific escrow throughout its duration. The key security element is the Electronic Book of Escrows (EKÚ), centrally managed by the Czech Bar Association. Before the buyer sends any money to the escrow account, every attorney is obliged to report the escrow into this electronic system. This report includes detailed identification data of both parties to the transaction.

Once the attorney enters the escrow into the system, the Electronic Book of Escrows itself automatically sends a confirmation of its registration to both parties (the buyer and the seller), which also includes the bank account number of the attorney escrow. Only when you receive this confirmation directly from the Bar Association's system can you be certain that everything is properly reported and you can safely send the funds. Subsequently, the attorney also reports the date of receipt of the funds and later the date of payout, of which both parties are again automatically informed by e-mail from the system.

Registration in the Electronic Book of Escrows prior to receiving the funds is a necessary condition for the transaction to be covered by the newly established Guarantee Fund of the Czech Bar Association (effective from January 1, 2026). In the event of an attorney's failure, clients are provided with compensation from this fund up to CZK 2,500,000. If it involves the escrow of a purchase price for the sale of residential real estate, the limit is up to CZK 5,000,000. However, without proper registration in the electronic system, this guarantee does not apply.

Deposit Insurance Fund and Identification of the Actual Owner

The Bar Association's Guarantee Fund protects clients against individual failure. But what is the procedure if the bank itself, where the escrow account is held, faces financial difficulties? This is where statutory deposit insurance comes into play.

By law, bank deposits are insured with the Czech Deposit Insurance Fund up to a standard limit of EUR 100,000 per client per bank. However, if the escrow involves the purchase price for the sale of residential real estate, a rule for increased deposit protection applies. In such a case, the statutory limit is increased by an additional EUR 100,000, meaning the total compensation can reach up to EUR 200,000.

However, for this protection to apply directly to the client (and not to the attorney, in whose name the account is formally held), regulations impose a crucial obligation on attorneys.

Before receiving the funds, the attorney must identify the actual owner of the funds to the bank. As a result, the bank and subsequently the Deposit Insurance Fund know that the money in the account belongs not to the attorney, but to the identified person. In the event of the bank's insolvency, the right to the payout of compensation from the Deposit Insurance Fund arises directly for the owner of the funds. The bank directly informs both the seller and the buyer about the performed identification via e-mail.

Thus, before sending the purchase price to a properly reported attorney escrow, the buyer can verify that they are transferring the money to an account that has been reported to the Electronic Book of Escrows and that the bank actually maintains for the given transaction.

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Summary: What to Check With an Attorney Escrow in Czechia?

🚩 System Confirmation: Before sending the money, you must receive an automatic notification from the Electronic Book of Escrows via e-mail. Registration is a condition for the escrow to be covered by the Guarantee Fund.
🚩 Guarantee Fund: From 2026, properly reported escrows are additionally protected by the Guarantee Fund of the Czech Bar Association, up to CZK 5 million for residential real estate.
🚩 Separate Account: Every attorney escrow must be kept in a separate bank account with a zero balance before receiving the funds. The account number is stated on the notification from the Electronic Book of Escrows and on the bank's confirmation.
🚩 Identification for Deposit Insurance: The attorney must report to the bank that you are the actual owner of the deposited money. Only then are you covered by state deposit insurance, which for residential real estate reaches up to EUR 200,000.

Do You Need to Secure a Safe Property Transfer?

Escrowing the purchase price is a step where making compromises does not pay off. At the ŠVANDA legal law firm, attorney escrows are handled strictly according to the latest regulations, with maximum emphasis on the client's legal and financial security. To prepare contractual documentation and ensure a smooth process for the entire transaction, proceed to the contact page or view the services in real estate and escrow.