Six buyers interested in premium properties in Prague 10 – Strašnice could certainly tell you a thing or two, having found themselves cast as supporting characters in a sequel to the award-winning film Catch Me If You Can starring Leonardo DiCaprio. Over the course of last year they were defrauded by a 31-year-old woman, and in a truly original way. Most likely through trickery, or thanks to contacts among the people responsible for the construction, she managed to obtain the keys to several luxury flats on the top floor of an attractive new development in Prague. The properties were furnished and ready for sale, so all it took was to act confidently enough and convince the buyers that the lady presenting herself as Denisa Bauerová or Denisa Gujdová had been authorised by the developer to arrange a future purchase contract. The result is damage that the Police of the Czech Republic have so far put at seven million crowns. Denisa, who is awaiting her verdict in custody, spent the money on luxury clothes and shoes and on exotic holidays. Meanwhile, the defrauded clients believed they would soon be moving into the home of their dreams. The seller, however, stopped communicating – she simply “ghosted” them. Experts warn that this is by no means an isolated case.
Don’t skimp on the formalities
For anyone looking to buy a property, whether to live in or to offer for rent, the lesson is simple. Securing the contractual paperwork and running checks on the other party before buying a property is definitely not the place to cut corners. Lawyers warn, for example, against “garage” estate agencies that push clients into signing quasi-legal contracts, much of which is unenforceable under Czech law. Agencies and sellers naturally hold a trump card in the form of “another serious buyer”, sometimes invented, sometimes real.
Buyers who let themselves be deceived are ultimately left with nothing but regret
Property fraud is, to a large extent, a psychological game. Buyers literally fall in love with their future home and then refuse to see or accept the “red flags”, just as in a romantic relationship. If you are in the middle of buying a property and feel mounting pressure to sign as soon as possible, by all means sleep on it three times over and consider consulting professionals, above all in law, real estate and financial advisory.
Never send a deposit on someone’s word alone
What makes the case of the bogus seller unusual in today’s market is that she was offering already furnished flats ready for immediate move-in. Far more common, however, is that buyers, especially in Prague and the surrounding area, are buying a promise of a future home. In such cases they typically pay a reservation fee of 50,000 to 200,000 crowns and subsequently 10% of the property’s purchase price, from which the reservation fee is automatically deducted. With reputable development projects, the remaining funds are paid only upon final building approval of the almost finished flats. Should a seller try to convince you otherwise, that is again a signal to stay alert and have the whole transaction checked again. Some developers currently offer clients the option of paying a larger sum and effectively making a term deposit at an agreed interest rate. Whether such an approach is more advantageous and less risky than putting the money into, say, a savings account or other investment instruments, we leave to your own judgement. Have you bought a property recently and are thinking of offering it on the rental market? Then do consider the services of the property management company Flat Service, which eliminates the risk of fraudulent conduct on the part of tenants. We will find you solvent and decent tenants, arrange all the contractual paperwork and make sure you get the flat back in perfect condition once the lease ends. If you are interested, contact us on +420 277 000 330 or at sales@flatservice.cz and get a no-obligation estimate of how much we can rent your flat for.
