Selling a rented flat in execution: how to sell it so the tenant can stay

Can a rented flat in execution be sold at all?

Yes, it can be sold, but not entirely freely: the sale must be coordinated with the bailiff.

Execution by sale of immovable property does not mean you have no say in the flat's future. Under the Enforcement Code (Exekuční řád) No. 120/2001 (particularly Section 69), the enforcement order has limiting effects on the property: without the bailiff's consent, you cannot dispose of the flat in a way that would frustrate the creditors' satisfaction. Moreover, the Czech Land Registry (Katastr nemovitostí) will record a note about the execution and possibly a mortgage (zástavní právo), which any serious buyer will see.

In practice, the sale is arranged so that the bailiff and creditors agree in advance on how to settle the debt from the purchase price. Once paid, the enforcement is stopped and the restriction is erased. A sale without the bailiff's knowledge could be invalid or ineffective, and no reputable buyer would enter into such a transaction.

Similar situations are covered on the page about buying out a property with a mortgage or debt.

What happens to the tenant after the sale?

The tenant typically remains in the flat on the same terms as today.

When ownership is transferred, the new owner steps into the rights and obligations of the landlord (Section 2221 of the Civil Code No. 89/2012). The tenancy agreement thus continues to apply, including the agreed duration and rent amount. The sale itself is also not grounds for the new landlord to terminate the tenancy; the grounds for termination are limited by law (Section 2288 of the Civil Code).

For the tenant, a voluntary sale is therefore usually calmer than an auction. It is good to explain the situation to the tenant and inform them who will receive the rent after the transfer and how the deposit (kauce) will be handled. This should be explicitly set out in the purchase agreement.

We also buy properties with tenants in this way; see more in the section on buying out a property with a tenant.

How does the sale proceed step by step?

The entire process takes roughly a month, with the longest part being the registration at the Land Registry.

1. Assess the situation. Send details of the flat, the tenancy agreement and a list of enforcements. You will receive a written, non-binding offer within 24 hours.
2. Agreement with the bailiff and creditors. The amount of the claims and the method of their settlement from the purchase price are verified.
3. Sign the contracts. Usually within 1–3 days; the deposit is paid upon signing the contract.
4. Solicitor's escrow. The remainder of the purchase price is held with a solicitor so neither party bears unnecessary risk.
5. Registration at the Land Registry. Takes roughly 3–4 weeks. The land registry office cannot decide before 20 days have passed since notifying the owner, and the average registration time is roughly 22 days (Czech Land Registry Act (Katastrální zákon) No. 256/2013). Ownership transfers upon registration.
6. Final payment. Within 5 days of registration, the debt is settled from escrow and any remainder goes to you.

The general process is also described on the page how it works.

Voluntary sale or forced auction?

A voluntary sale gives you greater control over price, timing and the tenant than a forced auction.

An auction also may not cover the entire debt, so part of the debt may remain. If an auction has already been ordered, read about rapid sale before an auction.

What to watch out for

The most common issues arise with payments, rent and other debts.

• Rent. The bailiff can seize rental income and the tenant may be instructed to pay it elsewhere. Explain this to them so they don't pay twice.
• Multiple enforcements and mortgages. The purchase price must cover all registered claims, otherwise the sale will fail. Ask for a list.
• Insolvency. If insolvency proceedings are being conducted against you, special rules apply under the Insolvency Act (Insolvenční zákon) No. 182/2006 and the sale is usually handled by the insolvency administrator (správce).
• Cash payments. Cash payments are limited to 270,000 CZK per day (Act No. 254/2004). A serious sale takes place cashless through solicitor's escrow.
• Taxes. Real estate acquisition tax (daň z nabytí nemovitostí) was abolished (Act No. 386/2020). Income from the sale may be subject to income tax (Act No. 586/1992); it depends, for instance, on how long you owned the property and whether you lived in it. Check with the Tax Office or a tax advisor.
• Co-owners. The general pre-emption right of co-owners was abolished. Only a limited right remains after acquisition through inheritance for 6 months (Section 1124 of the Civil Code).

What to do immediately

The most important thing is to gather the documentation and not leave the matter unresolved, as the debt and enforcement costs typically increase.

1. Request an extract from the Czech Land Registry (Katastr nemovitostí) and find out what notes and mortgages burden the flat.
2. Obtain the enforcement order (usnesení o nařízení exekuce), the enforcement instruction (exekuční příkaz) and possibly notice of auction (oznámení o dražbě).
3. Find the tenancy agreement, records of rent payments and proof of the deposit.
4. Find out the current debt amount from the bailiff.
5. Complete the form below the article. You will receive an assessment and a non-binding written offer within 24 hours; solicitor's escrow and legal services are free, without repairs or vacating.

Nothing commits you and the decision is yours. Read more about rapid property sales in the section I need to sell a property quickly.