Yes, but the security provider must be the buyer, not the seller. A security interest may also be granted over property that the security provider will acquire in the future, and it arises when the buyer becomes the owner. ÚGKK confirms that the cadastre may approve both registrations if the purchase agreement and security agreement are contained in a single document and a single application seeks registration of both ownership and the security interest. According to ÚGKK, an agreement under which the seller grants security over their own property in their own favour cannot be registered.
The buyer does not have the full purchase price available at once and either does not want to take out a loan or cannot obtain one. You agree that part will be paid on signing and the balance in instalments. The buyer nevertheless becomes the owner of the property upon constitutive registration in the cadastre, rather than after the final instalment (Section 133(2) of the Civil Code). If the buyer then stops paying, the seller is left with only a claim. A security interest over the property sold can therefore protect the seller. The terms on which the parties agree to grant it are crucial, however.
Why the seller cannot grant security over the property to themselves
In Cadastral Bulletin 1/2022, the Geodesy, Cartography and Cadastre Authority (ÚGKK) considered an agreement in which the seller acted as both the security provider and the secured creditor. The seller granted a security interest over their own property, and the agreement provided that, upon constitutive registration, it would pass to the buyer as the new security provider. ÚGKK considers this arrangement incapable of registration. A security interest is granted over an asset owned by the security provider (Section 151d(3)) and, according to ÚGKK, is a right over another person’s asset. If the creditor and the security provider were the same person when the agreement was concluded, ÚGKK’s view is that the rights and obligations under it would be extinguished by merger (Section 584). According to ÚGKK, a provision stating that the security interest will pass to the buyer upon constitutive registration does not change this.
How to structure the security interest
The buyer is the security provider, and the collateral is the property they are acquiring through the purchase. A security interest may also be granted over an asset that the security provider will acquire in the future (Section 151d(4)). It arises when the security provider acquires ownership, and its creation is entered in the cadastre as of the date on which the buyer acquires ownership (Section 151f(2) and (3)).
In the same bulletin, ÚGKK confirms that registration of a security interest over property not yet owned by the security provider at signing may also be approved where the purchase agreement and the agreement granting the security interest are contained in a single document, and a single application seeks registration of both ownership in favour of the buyer and the security interest in favour of the seller. The application must cover all legal acts in the agreement that require constitutive registration, namely both the transfer of ownership and the grant of the security interest. The Cadastral Act expressly provides for a single agreement containing several legal acts.
The following quotation is reproduced in its original language:
Prílohou návrhu na vklad môže byť len jedna zmluva, ktorej obsahom môže byť viac právnych úkonov.
What the agreement should address
The agreement granting the security interest must identify the secured claim and the collateral (Section 151b(2)). For a sale with payment in instalments, the secured claim is the outstanding balance of the purchase price. It is also advisable to address the following matters:
- the instalment schedule and the consequences of late payment, such as the entire outstanding balance becoming due,
- how the seller may recover the debt from the collateral if the buyer fails to pay, particularly whether the property may be sold other than at auction (Section 151m(8)),
- the ranking of security interests if the buyer’s bank finances part of the price, since priority of payment is determined by the order of registration (Section 151k(1)),
- the seller’s obligation to issue confirmation of payment and apply for removal of the security interest once payment has been made (Section 151md(3)).
If the seller is acting in the course of business and the buyer is a consumer, the agreement is a consumer contract. The seller may then recover the debt from the collateral only by sale at auction or under special legislation, rather than by a direct sale (Section 53(11)), and the consequences of late instalment payments must be structured with regard to Section 53(9) and (10).
An agreement under which the seller takes ownership of the property back in satisfaction of the debt if the buyer fails to pay is invalid if concluded before the claim falls due (Section 151j(3)). Further details appear in the question on the prohibition of forfeiture of collateral. Withdrawal from the agreement is another option alongside the security interest. If the buyer fails to pay even within a reasonable additional period, the seller has a statutory right to withdraw (Section 517(1)). The agreement may also specify the grounds for withdrawal in greater detail. Withdrawal cancels the agreement from the outset unless the law or the agreement provides otherwise (Section 48(1) and (2)). The choice of legal mechanisms and how to combine them depend on the outstanding balance and whether the buyer will further encumber the property. If the buyer finances the balance with a loan and the bank requires the seller to sign the security agreement, that is a different situation, which we describe in the question the seller signs the bank’s security agreement.
How we can help
We will prepare the purchase agreement incorporating the seller’s security interest as a single document and submit a single application for registration. We will structure the security for the outstanding balance as part of our security agreement service, and prepare the contractual documents and cadastral filing as part of our drafting agreements and registration applications and application for registration in the cadastre services.
This answer provides general information on the law as at 3 October 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.
