Lawyer escrow when buying property: why the money should not go straight to the seller

Imagine an ordinary flat purchase: the buyer sends the money, the seller signs the agreement and the application goes to the land register. Between these steps, one party has performed while the other has not. This is where the worst scenarios arise: registration is suspended, the seller encumbers the property in the meantime or the parties simply fall out.

How escrow works

Lawyer escrow provides a straightforward solution: after signing, the purchase price is paid into a separate lawyer’s escrow account, distinct from the lawyer’s own assets. The lawyer releases the money to the seller only once the agreed conditions are met, typically after registration of the buyer’s ownership is approved.

If registration fails, the money is returned to the buyer under the escrow terms agreed in advance. The seller knows the money actually exists and is waiting for them. Both parties have a third person overseeing the process.

Escrow + authorisation + land registration = a complete transfer

Escrow makes most sense as part of the full package: the lawyer prepares the sale agreement, authorises it (assuming responsibility for its content), arranges escrow and files the land register application. One lawyer with professional indemnity insurance is responsible for the entire transfer.

What to ask when someone offers escrow

1. Where exactly will the money be held? The right answer is a separate escrow account, not an ordinary operating account.
2. Exactly when will it be released? The release conditions should be set out clearly in the escrow agreement.
3. What if registration fails? The agreement should state clearly to whom, and when, the money will be returned.

We provide escrow for Slovak and Czech transfers, including cases where a Slovak buyer purchases in Czechia or vice versa. See the terms and process on our Complete property transfer service page.