Dividing a building into units: the owner's declaration (prohlášení vlastníka)

When you need a declaration

1. New residential project

   Units can be defined even in a building under construction, as soon as it can be registered in the Land Register (survey plan (geometrický plán), document confirming the type of use; as a rule, the building must be enclosed externally by perimeter walls and a roof). Registration of the declaration creates units under construction, which can be transferred and mortgaged even before completion.

2. Dividing an existing building

   An apartment or office building in single ownership that you want to sell unit by unit. Or a building whose flats are to pass to individual owners.

3. Amending the declaration

   Loft conversion, additional storey, merging or splitting of units, change of use. After units have been sold, the written consent of the affected owners and a majority of votes of all owners are usually required (Section 1169 of the Civil Code).

What the declaration contains

The required content is set out in Section 1166 of the Civil Code. The declaration must state at least:

• details of the land, the building, the municipality and the cadastral area,
• definition of the units: name, number, location and purpose of use (flat, office, garage…),
• designation and description of the common parts, including those reserved for the exclusive use of the owner of a particular unit,
• the size of the shares in the common parts,
• rights in rem and other rights and encumbrances that pass to the unit owners, for example an easement (in Czech) for a transformer station.

The declaration is accompanied by floor plans of all storeys, or diagrams of them, showing the location of the flats and common parts and the floor areas of the flats (Section 1166(2)). Floor area is calculated under Government Regulation No. 366/2013 Coll. For a maisonette, for example, the staircase is counted only by its lower projection.

Shares in the common parts can be determined according to the nature, size and location of the flat, or set as equal. Otherwise, they follow the ratio of floor areas (Section 1161). The share also determines the number of votes the owner has at the SVJ general meeting (Section 1206(1)).

How we work

1. Documents and quote

   You fill in the form, and we check the Land Register records and your documents. We send a quote with the price and timetable within 1 business day.

2. Measurement survey and floor plans

   Our partner surveying firm measures the building floor by floor and prepares floor plans with floor areas. If you have up-to-date documentation, we work from it.

3. Draft declaration

   We define the units, common parts, exclusive uses and shares. Together with you, we decide what to sell as separate units, what as part of the flats and what as common parts in exclusive use.

4. Signing and registration in the Land Register

   We prepare the application for registration and communicate with the Land Registry Office. The units come into existence upon registration in the Land Register.

5. SVJ and sale of units

   We set up the owners' association (SVJ), prepare its articles of association and the entry in the register. We follow up with purchase agreements and escrow of the purchase price.

Owners' association: watch the fourth sale

An owners' association (in Czech) must be formed in a building with at least five units, at least four of which belong to four different owners (Section 1198(1)). After that, the Land Register will not record the transfer of a further unit until the formation of the SVJ has been proven (Section 1198(2)). Without an SVJ registered in time, sales of the project can therefore come to a halt. What counts is the number of different owners, not the number of units sold.

That is why we set up the SVJ in advance. A developer, as the sole owner of all units, can set it up alone (Section 1200(1)), and the articles of association (in Czech) then do not need to take the form of a public deed (Section 1200(4)). The SVJ comes into existence on the date of its entry in the public register (Section 1204).

Common mistakes developers make

Unclear exclusive use

Balconies, loggias and terraces are common parts even if they are accessible only from a flat; in that case, they are by law in the exclusive use of the owner of that flat (Section 5(1)(f) of Government Regulation No. 366/2013 Coll.). For garages and parking spaces in the building, you need to decide whether they will be a separate non-residential unit (a garage, or possibly the whole communal garage as one unit in co-ownership), part of a flat, or a common part in exclusive use. Front gardens and outdoor parking spaces lie on the land: the land can be a common part with exclusive use, or it can remain outside the apartment co-ownership. If the declaration does not describe precisely who owns what, disputes with the SVJ arise. Analysis (in Czech)

Land

The land on which the building stands is always a common part or, if the building stands on someone else's land under a right to build, that right to build (Section 1160(2)). Surrounding plots, such as a garden or a car park, need to be decided on deliberately.

Shares

A share in the common parts that is determined vaguely or incorrectly is disregarded (Section 1168(2)). Yet the shares determine the votes in the SVJ.

Forgotten easements

Easements, for example for a transformer station, utility lines or a right of way on foot and by vehicle, belong in the declaration as rights and encumbrances that pass to the unit owners (Section 1166(1)(c)).

Late amendments

After the sale, an amendment requires the written consent of every owner whose rights and obligations it affects. For an encumbered unit (e.g. by a bank's mortgage), the written consent of the holder of that right is also required if the amendment affects their rights. In addition, a majority of votes of all owners is needed for the amendment to take effect, unless it affects all of them (Section 1169(1)). Some amendments, such as a change in the use of a flat at the owner's request, are approved by a majority alone (Section 1169(2)). Analysis (in Czech)

From the declaration to handing over the keys