Inherited flat with a tenant: how it works

What happens to the tenancy when the landlord dies

Tenancy of a flat does not terminate upon the landlord's death. A tenancy agreement is a contractual obligation that transfers to the heirs along with the property. For the tenant, therefore, nothing changes in their daily life: they continue to live in the flat, pay rent according to the lease, and the relationship is governed by the same rules as before (Czech Civil Code No. 89/2012, § 2201 et seq.).

The estate passes to the heirs upon the death of the deceased (testator) and the court confirms it in probate proceedings. The confirmation has retrospective effect to the date of death (§ 1670 of the Czech Civil Code No. 89/2012). Until the proceedings conclude, it may be unclear to whom the tenant should pay the rent. In such a situation, it is sensible to reach an agreement with the heirs or, if necessary, with the court officer about how the rent will be collected and recorded until then.

Who is the landlord and what does it mean

Once the inheritance is confirmed, the heir becomes the landlord. If multiple people inherit and the flat remains in co-ownership, they are joint landlords. Upon transfer of ownership to a rented flat, the new owner assumes the rights and obligations of the landlord (§ 2221 of the Czech Civil Code No. 89/2012). In practice, this means:

• Rent belongs to the new owner and is paid according to the original lease.
• Deposit (security deposit) is not returned simply because the owner has changed. The new landlord is responsible for its return when the tenancy ends, so verify whether the deceased actually accepted it and where it is held.
• Maintenance of the flat remains the landlord's obligation; any defects that prevent proper use must be remedied.
• Service charge reconciliation must be settled even for the period before the death of the deceased, if not already done.

It is advisable to notify the tenant in writing of who is now the landlord, which account to pay to, and how to contact them.

Rights and obligations of the tenant

The tenant has the right to use the flat peacefully, even during the inheritance proceedings. At the same time, they must continue to pay rent and service charges, look after the flat, and report any defects. A change of owner is not grounds for increasing rent or terminating the lease.

A fixed-term tenancy ends upon expiry of the agreed period, unless the parties agree otherwise. An open-ended tenancy may end by agreement, notice, or other lawful means. For a flat, the landlord cannot terminate the tenancy without cause. The grounds for termination are set out in the law (§ 2288 of the Czech Civil Code No. 89/2012) and the notice must be in writing and have the required legal elements. This is an area where mistakes are easily made, so it is worth seeking legal advice before taking any steps.

The fact that you have inherited the flat and wish to use it yourself is not in itself necessarily sufficient grounds for ending the tenancy. It always depends on the specific lease and the legal conditions.

What the heir should do in practice

The recommended approach is straightforward and stress-free:

1. Obtain the tenancy agreement and all amendments. Find out the term of the tenancy, the amount of rent, service charges, and the deposit.
2. Check whether the rent is being paid and whether there are any arrears.
3. Inform the tenant of the situation and who will act as the new landlord.
4. Reach agreement with any other heirs about who will manage the flat.
5. Decide what to do with the flat: continue renting it out, use it yourself, or sell it.

If the tenant asks you to make repairs or provide service charge reconciliation, do not do anything under pressure. Get everything in writing and seek legal advice if necessary.

Why the tenant is not a barrier to sale

A flat with a tenant can be sold. The tenancy does not end upon transfer of ownership; the new owner assumes the rights and obligations of the landlord (§ 2221 of the Czech Civil Code No. 89/2012). The buyer will therefore take over both the flat and the tenancy relationship. For some buyers this is acceptable, as they acquire a flat with an existing tenancy. Others assess an occupied flat differently, so the price and level of interest can vary.

If you are dealing with the inheritance with multiple heirs, it helps to know that the general right of pre-emption of co-owners has been abolished. It applies only for six months from the creation of co-ownership if the share arose through inheritance (§ 1124 of the Czech Civil Code No. 89/2012). More on this topic can be found on the page sale of inherited property, and on occupied flats on the page purchase of property with a tenant.

How the sale of an occupied flat proceeds

Ownership of the property is transferred only upon entry in the Czech Land Registry (Katastr nemovitostí). The Land Registry office must not decide before 20 days have passed since notification of the owner (Land Registry Act No. 256/2013), and the average time for registration is approximately 22 days. In the case of a purchase, the procedure is as follows:

• offer within 24 hours, in writing and without obligation,
• signing of contracts and deposit usually within 1–3 days,
• registration in the Czech Land Registry approximately 3–4 weeks,
• payment of the remainder of the purchase price within 5 days of registration from the solicitor's escrow account.

Solicitor's escrow and complete legal services are provided free of charge, with no payment for repairs or eviction. Payment is cashless; cash payment is limited to 270,000 CZK per day (Act No. 254/2004). Full details can be found in the overview how the purchase works.

Regarding taxes: real property acquisition tax has been abolished (Act No. 386/2020). Income tax on the proceeds of sale is governed by Act No. 586/1992 and depends in particular on the time test and whether it was the owner's residence. Verify your specific situation with the Czech Tax Administration or a tax adviser.