Lawyer's escrow of the purchase price

The buyer deposits the price into a dedicated escrow account held by a lawyer. The funds remain there until a condition agreed in advance is met, usually registration of the buyer's ownership in the Land Register, and only then are paid to the seller. Both parties therefore have assurance.

Lawyer's escrow is held in a separate account, apart from the firm's funds, with conditions precisely defined in the agreement. Legal practice is also covered by professional liability insurance. The money is therefore not part of the firm's ordinary funds.

When the escrow agreement's condition is met, most often once the Land Register records the buyer as the new owner. More detailed conditions can be set, for example removal of old encumbrances or repayment of a mortgage.

The principle is similar: an independent person holds the money until a condition is met. Lawyer's escrow is often flexible in setting conditions and connects smoothly with preparation of the purchase agreement and transfer, which we can handle together. We advise which form suits your transaction.

The escrow agreement addresses that too. If the agreed condition is not met, for example because registration is rejected, the funds are returned to the buyer under the agreed rules. That is why release and return conditions are central to the agreement.

Not for amounts usual in property and ownership-interest transactions. Under § 4(1) of Act No. 394/2012 Coll., cash payments over €5,000 are prohibited; the higher €15,000 threshold applies only where both parties are non-business individuals. The prohibition relates to the payment value, so splitting the price into smaller handovers circumvents the rule rather than resolving it. Breach does not invalidate the agreement, but creates an unnecessary transaction problem. We explain the details, including instalments, in How much can be paid in cash on a purchase? and Cash payment limits are lower from January 2026.

When buying from a VAT payer, this question needs to be asked in advance. Under § 69(13)(c) of the VAT Act, one statutory ground for finding that the customer should and could have known tax would not be paid is payment to an account other than one published on the payment date in the list of accounts notified to the Financial Administration. The law permits notification of an account belonging to another person, but this must be done correctly and in advance. We therefore address it when structuring escrow payments, before the money is sent. We discuss all three statutory grounds in Can I be liable as a customer for VAT my supplier has not paid?.