Getting Your Reservation Fee Back: Supreme Court Sides with Buyers Again

The Trap Called a Reservation Agreement

In practice, I very often encounter a situation where a prospective buyer signs a reservation agreement (legally often a future purchase agreement or a mixed agreement), in which they commit to buying a house or apartment for an agreed purchase price. This agreement is usually very brief and addresses the detailed conditions of the sale itself only in general terms. In the vast majority of cases, the future purchase agreement is not attached as an annex to the reservation agreement.

The prospective buyer thus commits in the reservation agreement to conclude a purchase agreement without knowing its full content, which cannot even be inferred from the text of the reservation agreement or its annexes. Only later does the agent or seller present the text of the purchase agreement containing the specification of the property, provisions on rights and obligations arising from defects, a payment schedule, and often also contractual penalties. The other party often does not accept the prospective buyer's comments on the text of the agreement and, in the event the agreement is not concluded, threatens forfeiture of the reservation fee as a contractual penalty.

Supreme Court: Failure to Conclude a Generally Defined Agreement Cannot Be Penalized

The Supreme Court has now ruled against this practice in its judgment file No. 23 Cdo 491/2025. This dispute involved, among other things, the return of a blocking deposit (reservation fee) in the amount of CZK 100,000.

The Supreme Court stated that if a future agreement (which is often contained in a reservation agreement) defines the content of the future agreement only in general terms, a contracting party cannot be penalized for refusing to conclude a purchase agreement containing specific conditions that were not explicitly agreed upon beforehand.

The law does not presume in such a situation that one party could unilaterally determine the specific content of the purchase agreement and force the other party to conclude it under the threat of a contractual penalty. If the content of future rights and obligations was not agreed upon as complete, the entitled party should seek to have this specific content determined by a court, not force the signing of its own draft and penalize any failure to conclude the agreement with a contractual penalty.

What Does This Mean for Buyers in Practice?

The Supreme Court has previously issued decisions that complicated the transformation of a reservation fee into a contractual penalty for sellers and agents. The current decision thus continues this trend. From the buyer's perspective, it clearly follows that in order to validly penalize the failure to conclude a purchase agreement, the reservation agreement itself would have to contain an agreement on all specific conditions of the future purchase. This generally means that the wording of the purchase agreement would have to form an annex to the reservation agreement.

Given that most reservation agreements are nowhere near this detailed and are limited only to a basic definition of the property, price, and reservation period, a wide room for defense opens up for buyers. If you have paid a reservation fee but subsequently do not want to conclude the purchase agreement for various reasons, you now have another argument for the return of the paid money.

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Summary: How Not to Lose Your Reservation Fee?

🚩 Watch out for new conditions: If, after signing the reservation, the seller or agent presents you with a purchase agreement whose text was not part of the reservation agreement, you cannot be validly penalized for refusing to conclude it, and the reservation fee must be returned to you.
🚩 No unilateral dictation: The seller has no right to unilaterally add specific rights and obligations to the final agreement that you have not previously approved, and force their acceptance.
🚩 Retaining the fee is usually unjustified: Did you not conclude the purchase agreement and the real estate agency kept the paid reservation fee? In light of the Supreme Court's decision, such a procedure may be unjustified.

Is the Seller or Real Estate Agency Refusing to Return Your Reservation Fee (Deposit)?

Although this is a common situation, given the decision-making practice of the Supreme Court, you as a buyer have a great hope of getting it back. Everything depends on the specific wording of the reservation agreement or the future agreement, as well as the behavior of the parties in the period after its conclusion. I will gladly assess whether you are entitled to the return of the reservation fee and subsequently represent you in negotiations with the other party. Contact me or read more about my real estate law services.