Property developer (developer)
A company that prepares, finances and builds new flats or houses and sells them to end buyers. It is usually a special-purpose vehicle (a project s.r.o., i.e. limited liability company) set up for a single project. Sales before completion go through a reservation agreement (rezervační smlouva) and an agreement on a future purchase agreement (smlouva o smlouvě budoucí kupní); the purchase agreement is signed after occupancy approval (kolaudace) and registration of the units in the land registry.
Example
A developer offers a 1+kk (studio with kitchenette) for CZK 5,000,000 including 12 % VAT (DPH); new flats in Prague cost around CZK 146,000–150,000/m². A buyer with a CZK 4,000,000 mortgage at 5.00 % and a payment of CZK 23,384 pays deposits according to the payment schedule; the project's partner bank usually has contract templates ready and approves faster.
In practice
Look at the developer's track record and completed projects, its ownership of the land on the title sheet (LV), the building permit and how deposits are secured (escrow, bank guarantee). You are not obliged to take the mortgage from the partner bank. The real risk is paying large deposits straight into the project s.r.o.'s account with no security: if the company goes bankrupt, you are just an unsecured creditor.
How it differs
The general contractor (construction company) only builds to order; the developer owns the project and sells it. An estate agency is an intermediary, and even when it markets a new build, the party to the purchase agreement is the developer. Nor is a project s.r.o. the same as its parent group when it comes to liability.
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