Context
NAWI Europe was approached by a client who requested that they prepare the necessary contractual documentation for the purchase of a plot of land with a building intended for demolition. The problem was that the building was subject to enforcement proceedings by the Tax Office, which complicated financing and the transfer of ownership significantly. The goal was to legally secure the transaction and agree on terms that would not disadvantage the client in the event of a delay or withdrawal from the agreement.
Tasks
- Prepare a reservation agreement, followed by a draft purchase agreement, to provide the client with maximum legal protection.
- Agree on provisions that exclude any sanctions against the client in the event of default or withdrawal from the agreement.
- Respond to the creditor bank's comments about the enforcement proceedings on the property.
- Provide a legal model that allows for bank financing and removal of encumbrances before the transfer of ownership.
Legal Analysis and Procedure
- We prepared a reservation agreement that emphasizes minimizing the client's obligations in risky situations.
- We identified an enforcement lien registered by the Tax Office and analyzed options for its removal in connection with the payment of the purchase price.
- The bank rejected the initial payment mechanism, so we developed a legal structure that allows for the transfer of part of the purchase price directly to the tax office's account.
- This made it possible to remove the lien before the transfer of ownership and meet the bank's requirements.
- We negotiated a CZK 1.5 million discount on the purchase price, considering the legal complexities and our client's active role.
Key Point
The introduction of a hybrid payment model was the decisive factor. Part of the funds were transferred directly to the Tax Office to settle the enforcement proceedings, and the rest were transferred to the seller’s account. This convinced the bank to finance the project.
Result
- All contracts were successfully signed, and the terms of the agreement were fulfilled.
- The Tax Office withdrew its enforcement proceedings before the transfer of ownership.
- The bank provided financing, and ownership was transferred to the client.
- The client also received a CZK 1.5 million discount on the original price.
“The project was complex, but thanks to NAWI’s solution, I purchased the property on favorable terms and without legal risks. Legal support was key in negotiations with both the bank and the seller.”
Legal Areas
- Enforcement law and buyer protection
- Real estate law and transfer of ownership
- Bank financing and securing obligations
Keywords
#EnforcementProceedings #RealEstateFinancing #ContractDocumentation #Developer #NAWI
