Legal Q&A · Property Transfer

How does a reservation agreement work, and what happens to the reservation fee?

Law as at 21 July 2026

Answered by , Czech and Slovak attorney, admitted to the Slovak and Czech Bars (SAK 300422 · ČAK 19654).

Short answer

A reservation agreement is an unnamed contract: the law does not regulate it specifically, but it is valid if it does not conflict with the law’s content or purpose. Its wording is decisive, particularly the parties’ commitments and what happens to the reservation fee if no purchase agreement is concluded. An agreement with a consumer must not contain unfair terms.

Is a reservation agreement legally permitted?

A reservation agreement is an unnamed, or innominate, contract. Parties may conclude an agreement that is not specifically regulated, provided it does not conflict with the content or purpose of the law (Section 51 of the Civil Code). It is therefore valid, but because the law does not provide a detailed framework, its wording determines everything.

If it also contains a commitment to conclude a purchase agreement within a specified period and agreement on its essential terms, it approaches an agreement to enter into a future contract (Section 50a). It then has the corresponding consequences, including enforceability of the obligation to conclude the contract. Distinguish carefully between merely holding the property and committing to buy it.

What happens to the reservation fee?

The agreement must expressly address the fee. Common arrangements include:

  • Crediting it towards the purchase price if the transaction proceeds.
  • Refunding it if the transaction fails for a reason attributable to the seller or agency.
  • Forfeiture, in whole or in part, if the person reserving the property withdraws without justification.

Without clear rules, disputes arise over who is entitled to the fee. For consumers, disproportionate forfeiture risks being invalid as an unfair contractual term.

What to watch for with consumers

If the person reserving the property is a consumer, the agreement must not contain unfair terms. If concluded remotely or away from business premises, the consumer may have 14 days to withdraw. It also matters whether the agency collects the fee for itself or on the seller’s behalf.

We structure reservation agreements to protect the agency and the transaction through our reservation agreement service. Subsequent purchase agreements and registration are covered by agreement and registration preparation. Comprehensive support is available through our legal services for estate agencies.

This answer provides general information on the law as at 21 July 2026. It does not constitute legal services or replace an assessment of an individual case. The details of your situation may differ. Book a consultation to discuss them.

More legal questions

All questions and answers
  1. A relative and I are exchanging plots. How does an exchange agreement work, and what about tax? An exchange agreement is a purchase agreement with payment in kind: each party is the seller of the plot they give and the buyer of the plot they receive. Ownership of both plots passes through cadastral registration under one agreement. A difference in value is settled by a balancing payment. For tax, both parties transfer property; income is the value of the plot received plus any balancing payment. The five-year ownership exemption is assessed separately for each party, and a new period begins for the received plot.
  2. When do I become the owner of a property: on signing the agreement or on land registration? You become the owner only when ownership is registered in the land registry, not when the agreement is signed. Signing creates contractual obligations only; the seller remains the owner until the registry’s decision. That is why the price should be paid through escrow, releasing funds only after registration, rather than paid to the seller before registration is permitted.
  3. What must an estate agency agreement contain? Under an estate agency agreement, the agency undertakes activities aimed at concluding a property agreement, and the client undertakes to pay commission. The agreement should clearly define its scope, commission amount and payment date, duration, any exclusivity, and the agent’s duties. Where the client is a consumer, additional protection applies, including a ban on unfair terms.
  4. What is the difference between constitutive registration, a declaratory record and a note in the cadastre? These are three types of cadastral entry with very different effects. Constitutive registration creates, changes or terminates a property right, based on an agreement and only on application. A declaratory record merely records an existing right, based on a public document such as an inheritance certificate or judgment. A note records a fact concerning the property, rather than a right, such as enforcement or a court dispute.

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Mgr. Patrik Tulinský, LL.M. Czech and Slovak attorney · SAK 300422 · ČAK 19654

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