Conditions for the safekeeping of funds are contractually guaranteed by the above-mentioned law firms.
Basic information for clients:
- When using RE/MAX Alfa, the securing of funds for property transactions is only provided by law firms that meet the conditions set by the RE/MAX head office or the bank.
- The parameters of safe custody are based on a standard defined by the law firm Vilímková, Dudák & Partners in cooperation with the RE/MAX head office, and is based on experience of safekeeping funds in excess of several billion CZK.
- All law firms used by RE/MAX network are contractually obliged to adhere to set parameters.
- These parameters minimize the risk of embezzlement, inter alia, and preclude the provision of custody by a separate lawyer (a separate lawyer or notary has always been involved in all known cases of embezzlement).
The main parameters for the safekeeping of funds include:
- A double check: There is always at least one double check of payments and authorization of payments.
- A unique account: The funds from each transaction are always held in a unique separate account, inviolable to third parties (for example, executors).
- Awareness: When a transaction is conducted on the escrow account, the bank automatically sends confirmation of the transaction to the relevant law firm, which then passes on the confirmation to all participants in the contract and, with their consent, also to the relevant real estate agent. Prior to each payment, the parties are informed that the condition for the payment of funds from the custody account has been met.
- Speed of payment: Payments of funds from the escrow account are made within three working days of the transfer conditions being met.
- Proven documentation: Standardized and verified documentation as established by RE/MAX head office is used in all cases of securing funds.
- Insurance: Each law firm used for the securing of funds has adequate lawyer liability insurance.
Conditions for the safekeeping of funds are contractually guaranteed by each law firm used.
- All funds are deposited in the law firms bank accounts of the agreed banking institution as defined by the contract.
- All monetary transactions are made by non-cash payments in accordance with the legal regulations of the Czech Republic. Cash transactions are only permitted at the request of the buyer or seller in accordance with the legislation of the Czech Republic governing the restriction of cash payments.
- The name of each escrow account shall contain the words “Escrow account” or similar, in order to clearly declare and distinguish the tied account from other accounts and to make the account inviolable vis-à-vis third parties (for example, executors).
- When signing a custody agreement, the client is provided with written confirmation or with an electronic bank account statement from the relevant bank confirming that the bank account named in the agreement is registered at the bank as a custody account and is maintained and controlled by the relevant law office.
- Each business case (and therefore each individual escrow agreement) is assigned a unique escrow account. During the term of the custody agreement, this account will be used only and exclusively for the specified business case.
- When concluding a custody agreement, all parties are identified in accordance with the requirements of the Act on Certain Measures against the Legalization of Proceeds from Crime and Terrorist Financing. The relevant law firm will verify the identity of all persons signing the custody agreement according to the established list of authorized identity documents or will request proof of identity by a relevant state authority.
- The relevant law office will handle the funds in the custody account only in accordance with the provisions of the written custody agreement, from which it cannot deviate without the prior written agreement of all parties, unless a binding decision by a public authority or generally binding legislation of the Czech Republic provides otherwise.
- All e-mail communication by the relevant law firm is sent with a guaranteed electronic signature from the law firm’s authorized person.
- All final contractual documentation intended for signature, sent by the relevant law firm via e-mail communication, is sent in PDF format provided with a guaranteed electronic signature from the law firm’s authorized person.
- For any transaction from / to the escrow account, the bank sends automatic information about the transaction, which is received by the relevant law firm. This information will then be sent by the law firm to all participants in the custody agreement without undue delay and, with their consent, also to the relevant RE/MAX and RE/MAX Czech Republic real estate agent. Contract participants will have an immediate overview of the movement of funds from / to the escrow account.
- The legal file relating to an individual transaction is submitted with the consent of clients at the request of RE/MAX Czech Republic.
- At the client’s request, the relevant law firm will submit an electronic bank statement from the escrow account in question to the client at any time.
- After crediting funds to the escrow account, the relevant law firm will notify the bank of the identification of the fund’s owner for the purpose of registring them in the deposit insurance system managed by the Deposit Insurance Fund.
- Payment of funds from the escrow account is made no later than three working days from the fulfillment of the conditions stipulated in the contract.
- All documents, the submission of which is subject to the payment of funds from the restricted account, are submitted in their original form or an officially certified copy, unless RE/MAX Czech Republic stipulates a different form for individual documents. In the case of purchase contracts, scanned copies of documents meeting all the requirements for payment may also be accepted, provided that the relevant law firm verifies the accuracy of the data from the current original title deed or from the title deed obtained from a remote paid statement from the state land registry (katastra) and guarantees this accuracy. In the case of tax returns, scanned copies of documents meeting all the requirements for payment can also be accepted.
- The authorization to pay funds from the escrow account is not held by one single individual. Instead, authorization for payment (a payment order) is performed simultaneously by two lawyers, each of whom has their own unique access data.
- The relevant law firm uses uniform and standardized documentation according to the requirements of RE/MAX Czech Republic for all business cases, which it then modifies according to clients’ requirements.
- The relevant law firm will prepare a custody agreement and accept funds for custody no later than two working days from the request by the RE/MAX real estate agent.
- The relevant law firm will keep the file in accordance with the requirements of the Czech Bar Association.
- The relevant law firm will inform the contracting parties and the RE/MAX real estate agents about the need to file a tax return when ownership of the property has been transferred in the state land registry (katastra), and in the event that it does not receive a tax return within two months of proving the transfer of ownership in the state land registry (katastra), will again inform all parties and the RE/MAX estate agents of this obligation.
- The relevant law firm undertakes to proceed in providing custody in accordance with the statutes and binding instructions of the Czech Bar Association.
- The relevant law firm has taken out adequate lawyer liability insurance.
