Handover day: how defects are handled under a Czech construction contract

On the day of handover, a client walks through a finished house or flat with a contractor and a clipboard. Everything seems to be there. The paint is clean, the taps run, the keys turn. A year later a crack follows the line of a wall, and the question becomes: who pays, and what does the contract say? The answers depend almost entirely on what was agreed before the first spade went into the ground and on what was written down on handover day.

This explainer outlines the general principles of Czech construction contracts and warranties for a reader who is a client, a buyer of a new home or an investor. It does not replace the advice of a lawyer who has read the actual contract.

The contract for work

Most building works are contracted as a contract for work (smlouva o dílo), regulated by the Civil Code (Act No. 89/2012 Coll.). The contractor (zhotovitel) undertakes to perform the work at its own risk, and the client (objednatel) undertakes to pay the price. The work can be a whole building, an extension or a renovation.

The contract should identify the work precisely, usually by reference to the approved documentation, and the price. Prices come in two common forms: a fixed price for the whole work, which gives the client certainty but pushes the risk of rising costs to the contractor, and a price based on a budget, in which the final figure depends on what is built. The type of price decides who carries the cost risk, and it affects how change orders are handled.

The contract also sets the schedule, payment terms, who supplies which materials, insurance and security, and what happens in case of delay. Larger infrastructure clients often use international standard forms, such as those of FIDIC, adapted to Czech law (as of 2026; check the individual tender). For private projects, a lawyer's draft is worth the fee.

Liability for defects

The core of the topic is what happens when the work is not as agreed. Under the Civil Code, the contractor is liable for defects in two situations. The first is defects that exist when the work is handed over. The second is defects that appear within the period for which the law or the contract makes the contractor responsible.

For a building delivered under a contract for work, a hidden defect must be raised without undue delay and at the latest within five years of handover (§ 2629 of the Civil Code). An implementing regulation may shorten that to two years for some parts of a building, and an agreed shortening is ignored if the client is the weaker party (as of 2026; check the Civil Code). This statutory liability is not the same as a contractual guarantee (záruka za jakost), which is voluntary. Guarantees are often given for around five years on the structure and around two years on equipment, but the contract decides.

The client's duty is to notify defects without undue delay once they are discovered, in the form the contract requires. Delay can reduce the client's rights, so a client who sees a defect and waits risks an argument that the notice was late. Written notice, with photographs and a description, is the safe form.

The remedies depend on the defect. If it can be repaired, the client can generally require repair at the contractor's expense. If it cannot, or the contractor fails to repair it, a reasonable discount on the price may be available. For a substantial breach, the client may be able to withdraw from the contract (as of 2026; check the Civil Code and obtain legal advice for a real case).

Handover

Handover (předání a převzetí) is the moment when the work passes from contractor to client and the periods begin to run. A proper handover is done with a protocol signed by both sides. The protocol records the date, the condition of the work, and any defects and unfinished items found during inspection, with a deadline for fixing each.

The details matter more than the ceremony. A client who signs a clean protocol for a building with visible defects weakens their position, because the defects are then hard to show to have existed on that date. A client who lists the defects and sets deadlines keeps the right to demand their removal. The same logic applies to the delivery of documents: certificates, test reports, manuals and as-built drawings are part of the work and should be handed over with it. Final approval for use by the building authority is separate, and the building permit process describes it.

Security for the client

A client's best protection is money held back. Contracts often provide for retention (pozastávka or zádržné): a share of the price withheld until defects on the list are removed or until the warranty period ends. The contractor may instead offer a bank guarantee or other security. A client who has paid everything in full has little hold over a contractor who is slow to repair.

The contractor, in turn, wants protection against late payment and against unjustified claims. A balanced contract defines when payments fall due (often by milestones), how disputes over quality are settled and what evidence is needed. Contractual penalties for delay can be agreed, but they must be set out in writing. Courts can review whether a penalty is excessive in some circumstances, so the amounts and the conditions should be drafted with care.

Insurance is another layer. Contractors commonly carry insurance for damage during construction and for liability to third parties, and the contract can require proof of it. For a private client, asking to see the insurance certificate is routine.

Subcontractors and the chain

The client's contract is with the main contractor, who is responsible for the work of its subcontractors. If a subcontractor's roof leaks, the client claims against the contractor. The contractor then looks to its own subcontractor under their contract. The structure of the industry, described in who builds Czech homes, shows why this chain is long and why contracts down the line should mirror the warranties given upstream.

Buyers of new flats

A buyer of a new flat from a developer is not party to the construction contract, but depends on it indirectly (see also what builders and developers owe you). The buyer's rights come from the sales contract and the law, and the developer, in turn, claims against its contractor. Handover of a flat is a smaller version of the same ceremony, with a protocol and a defect list. Anyone considering a purchase can look at the range of new flats for sale in Prague (in Czech) and ask each developer for its standard handover procedure and warranty terms. The guide to reservation agreements and escrow covers the money side of that process.

Frequently asked questions

How long is the warranty on a newly built house?

For hidden defects the Civil Code sets an outer limit of five years from handover, which can be shortened for some parts in limited cases (as of 2026; check the Civil Code). A contractual guarantee is separate and voluntary, so read both.

What if I find a defect after handover?

Notify the contractor in writing without undue delay, describe the defect, attach photographs and keep a copy. Then follow the procedure in the contract.

Should I withhold payment until defects are fixed?

Many contracts provide for retention of part of the price for this reason. Withholding payment outside what the contract allows can put you in breach, so check the terms and take advice.

Is a verbal agreement with a builder valid?

It can be valid, but it is hard to prove. For any real building work, put scope, price, schedule and warranty in writing.

Ask for the draft contract a week before you sign, and have it read by someone who has done this before.

This is a general explainer, not legal or tax advice.