Liens on Real Property are time-barred, under Czech Law. How do you know if a lien is time-barred? A lien does not expire before the claim secured by it. In other words, if the secured claim is not time-barred, the lien cannot be time-barred either. Therefore, the secured claim must be time-barred first (the limitation period is generally three years with certain exceptions).
The limitation period for a lien begins to run on the date on which the right could have been exercised for the first time. This means the date on which the pledgee's right to satisfy the secured claim from the pledge arose. In other words, the date on which the pledgee is entitled to demand that the secured claim be paid out of the proceeds of the realisation of the pledge (because the debtor has not duly and timely fulfilled the secured claim). The limitation period is three years.
How to delete a time-barred lien?
The first option is an agreement between the owner and the lienholder on the deletion of the lien from the land register. This is the easiest way. However, this is often resisted by lienholders. If the lienholder does not agree, the procedure is as follows.
- File a declaratory lawsuit with the court.
Beware of the pleading, it depends on the words: 'the lien is extinguished' is not the same as 'the lien does not exist' or 'the property is not encumbered by a lien'. The Supreme Court has been (perhaps too) consistent with this distinction. There is a difference between (1) conceding that a lien was created but subsequently extinguished, or (2) questioning whether the lien existed from the beginning. Choose the first option: the statute of limitations of the lien corresponds to the wording of Section 618 (Section 985) of the Civil Code; the claim should be for a declaration that "the lien is time-barred".
On the contrary, case law indicates that the claim "the lien does not exist" pertains to a defect in the legal basis for acquiring the lien. This would correspond to the wording of Section 986 of the Civil Code, which the Supreme Court considers incorrect (if it is actually a matter of the statute of limitations).
- Submit a request for the deletion of the expired lien from the land register.
If you have a valid court decision declaring the termination of the right of lien due to the statute of limitations, you can contact the cadastre. The lien is "deleted" by the cadastral office at the proposal of a person who has a legal interest in the deletion. This is primarily the owner of the Land or Building. It is necessary to submit a proposal for cancellation of the lien to the relevant real estate cadastre and pay an administrative fee (CZK 2,000). správní poplatek (2000 Kč).
Do you have doubts as to whether the lien on your property is time-barred? We will be happy to help you with its deletion.
