the Difference between Osobni Vlastnictvi and Druzstevni Vlastnictvi ownership

Post date: Feb 28, 2016 8:16:12 PM

What is the difference between private ownership (Osobní Vlastnictví) and cooperative ownership (Družstevní Vlastnictví) of a property in the Czech Republic?

There are two main types of property in the Czech Republic, and on the various Czech real estate websites you will find these marked as OV- osobní vlastnictví or DV- družstevní vlastnictví. As a rule, these are different forms of ownership, private versus cooperative.

The first point worthy of clarification is that the Czech Republic has no lease system as in other countries such as Israel. In Israel most properties are leased by the government for periods of several decades, and when the property changes ownership the lease is transferred to the buyer.

Private ownership (OV) in the Czech Republic was normally typical in the past of free standing homes, villas, and castles, but today it is typical of flats as well. New flats are almost always privately owned – OV.

The advantage of purchasing an OV property is that both an SRO company and a private individual can purchase them and the banks will provide mortgages because the property serves as security for their loan – so the prices of OV properties are slightly higher than those of DV properties because it is easier to finance them.

Properties owned by a cooperative (DV) are in fact cooperatively owned. Members of the cooperative purchase the right to be owners and to use a certain flat. The flat is registered in the Cadastral Register not as the private possession of the buyer, but rather as owned by the cooperative in which the member has certain rights (as well as obligations).

This type of ownership sometimes does not allow foreigners to purchase DV owned properties. The cooperative's memorandum of association (notarsky zapis) determines at times that only Czech citizens are entitled to be members of a cooperative, although this contradicts European Union laws. Sometimes even Czech SRO companies cannot be members.

DV flats are usually slightly cheaper than OV flats because the banks are more reluctant to give mortgages to owners of DV flats.

The advantage of purchasing a property from a cooperative is that there is no need to wait for confirmation because the buyer is the official owner of the flat, compared to a privately owned property where it takes time for the new owners to be registered in the Cadastral Register instead of the sellers, although from our experience the cadastral process has improved significantly in recent years.

There is also a possibility of changing the ownership of a property from DV to OV, but this requires the cooperation and willingness of all members of the cooperative. Naturally, this can take a long time, as if even one member does not agree it can cause real problems and drag out the process for many years.

In summary

Advantages of a privately owned property

Disadvantages of privately owned property

Advantages of a cooperatively owned property

Disadvantages of a cooperatively owned property

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