As a part of the services provided by our law firm, our clients are provided with the possibility to place money in escrow or documents in escrow if the given documents are related to the money placed in escrow. Escrow presents an effective means of protection of clients’ financial transactions, trade transparency, and securing meeting agreement terms and conditions. The law firm acts as guarantor and is legally responsible for the money in escrow to be used in such a manner which is agreed upon in the agreement or what the legislation says.
Clients most often use in connection to contracts regarding real estate transfers. During escrow connected with transfer of real estate, a so-called escrow agreement is entered, based on which one party deposits money for another party to a special and marked account opened for this purpose by our law firm. During the whole escrow period, the funds are deposited on the escrow account separately from any other funds of the law firm and from other clients’ funds. In the moment when all the terms and conditions defined by the escrow agreement (which defines all rights and responsibilities of both agreement parties and the law firm) are met, the law firm releases the funds in escrow to the authorized person.
Bilateral or multilateral agreements, the content of which is always adjusted for the individual needs of a given business transaction, are used for escrow in situations different from real estate transfer.
For the protection of clients’ funds, we find it appropriate to state that escrow is regulated by legislation and professional regulations of Czech Bar Association and Czech Bar Association monitors following these rules through electronic escrow registry, where every lawyer is obliged to report all their escrow into, and through their own supervision as well.
Our law firm’s remuneration fees for providing escrow services of funds are as follows:
- 4,000 CZK, VAT not included for escrow of amounts up to 1,000,000 CZK
- 6,000 CZK, VAT not included + 0.1 % of the amount of more than 1,000,000 CZK for escrow of amounts from 1,000,000 CZK to 10,000,000 CZK
- 20,000 CZK, VAT not included + 0.01 % of the amount of more than 10,000,000 CZK for escrow of amounts of more than 10,000,000 CZK.
The abovementioned remuneration fee includes escrow agreement drafting, account fees, potential document escrow if they are a part of the given transaction, and any other costs of the law firm incurring in connection to the escrow. However, the remuneration fee does not include law firm’s potential remuneration for the preparation of accompanying documents for the agreement (e.g. purchase contract) if the client requires the law firm to do so.