The concept of having a contract reviewed by a lawyer is now familiar among those who rely heavily on the expertise of legal services, but awareness of this issue among the general public remains low. In this article, we would like to introduce you to this legal service provided by lawyers.
Act No. 304/2009 Coll. allowed attorneys to provide services for the authorization of real estate transfer agreements as of September 1, 2009. Initially, the practice of attorneys authorizing contracts was relatively hesitant, primarily because society associates the certification and verification of legally binding documents with the role of a notary. Although the authorization of contracts by attorneys is still not entirely common, it is being utilized to a greater extent. The authorization of a real estate transfer contract by a lawyer is defined in Section 1a of Act No. 586/2003 on the Legal Profession as the following acts: drafting the real estate transfer contract, verifying the identity of the parties to the contract and their representatives, assessing whether the contract conflicts with or circumvents the law, or is contrary to public policy, and assessing whether the conclusion of the contract will result in a situation giving rise to damage. The attorney confirms the authorization of the contract in a clause.
Having a real estate transfer agreement authorized by a lawyer has several advantages
- “Saves you time”
- A real estate transfer agreement authorized by a lawyer is reviewed by the district office solely to determine whether it is consistent with the cadastral record and whether the procedural requirements for approval of the registration have been met. The district office does not check whether the contract contains the essential elements of a contract, whether the act is performed in the prescribed form, whether the transferor is authorized to dispose of the real estate, whether the expressions of intent are sufficiently clear and understandable, whether contractual freedom or the right to dispose of the real estate are not restricted, whether the contract is contrary to law, circumvents the law, or is contrary to public policy. As we have already mentioned, all of this is handled by an attorney, which ultimately saves you time. Furthermore, pursuant to Section 32(2) of Act No. 162/1995 Coll., the Cadastral Act, the cadastral office is required to decide on an application for registration within 20 days. Proceedings regarding an application for registration in the cadastre may take several months. A party to a real estate transfer agreement may request the attorney authorizing the agreement to file the application with the Cadastral Office. Based on a written power of attorney from the party, the attorney will prepare this submission and ensure its delivery to the Land Registry, including the relevant documents regarding the procedure, thereby relieving the party of further obligations.
- “Saves You Money”
- If you wish to expedite the land registry proceedings, you may pay an administrative fee of 266 EUR, and the land registry will decide on the approval of the registration within 15 days; however, you should keep in mind additional fees associated with, for example, the notarization of signatures on the real estate transfer contract. However, there is the option of having the contract authorized by a lawyer, which provides an additional benefit, as the lawyer:
- “Protects your interests”
- If you are acting as a party to a real estate transfer contract, particularly as the buyer, having the contract authorized by a lawyer provides you with protection. The lawyer is personally liable for any damages arising from a breach of duty by the lawyer during the authorization of the contract. The lawyer is required to notify the parties to the contract of the amount of insurance coverage. Insurance coverage may vary, starting from 100,000 EUR. The insurance coverage of Hronček & Partners, as a limited liability company, is EUR 1,500,000. The attorney must act with professional care and familiarize the parties with the content of the contract.
A lawyer may authenticate all contracts for the transfer of real estate, such as a purchase agreement, a gift agreement, an agreement on the settlement of joint property of spouses, an agreement on the settlement of co-ownership, and others. A lawyer may refuse to authenticate a contract. They may do so, in particular, if it is not possible to reliably verify the identity of any of the parties to the contract. Section 1b(3) of the Act on the Legal Profession governs a lawyer’s liability in circumstances where the lawyer fails to verify the true identity of the parties and does not refuse to provide the legal service. In this case, the attorney cannot be relieved of liability for damages caused by identity theft; this does not apply if the attorney proves that the aggrieved party to the contract was aware of the identity theft.
As we have mentioned, having a real estate transfer contract authorized by a lawyer offers several advantages. The contract is drafted by experts, the proceedings for registration in the land registry are faster, it is usually more cost-effective, and in the unlikely event of a problem, you are protected by the lawyer’s insurance. Contact us; we are here for you.
