What a technical and legal audit of an apartment building reveals before it is split into units

Why the audit comes before the project

A problem that surfaces only after works or sales have begun has to be solved under time pressure and usually at a higher price. The audit therefore comes first: it shows whether the conversion is feasible and which costs to expect.

The typical difference in value between selling a building as a whole and selling it unit by unit is +20–40%. This is an indicative range; the actual result depends on the audit findings, and the exact figure is determined by the feasibility study. The project passes through three gates (legal, permit and sales gate), and moves to the next phase only with confirmed numbers. The audit underpins the first of them. The process is described on the page How it works.

The legal part: what is checked in the Land Registry and the documents

The starting point is a current extract from the Czech Land Registry (katastr nemovitostí) and a review of its collection of documents (sbírka listin). Ownership of real estate passes upon registration in the Land Registry (the Land Registry Act, No. 256/2013 Coll.), so it must be clear who the owner is, on what legal title, and whether the registered position reflects reality.

• Ownership structure – a single owner, co-owners, inherited shares. With several owners, agreement on the way forward is essential.
• Liens – mortgages and other security (zástavní práva) must be dealt with before units are sold, typically by deletion or by a partial release from the lien.
• Enforcement, insolvency and restrictions on disposal – notes in the Land Registry and entries in the insolvency register can block a sale.
• Easements (věcná břemena) – rights of way, utility lines or a right of residence. An easement burdening the whole building carries over to the individual units after the split.
• Tenancy agreements – the terms, duration and position of tenants, who may become buyers or may remain in their flats.
• The land – whether it belongs to the building or is owned by someone else, which fundamentally changes the sale options.

Building-law status and the occupancy approval

The second half of the legal audit confirms that the building is properly documented under building law. It checks whether there are records of the building permit and of lawful use (the kolaudace, i.e. final occupancy approval), whether the actual state matches the documentation, and whether any unauthorised extensions, loft conversions or layout changes have been made.

With older buildings it is necessary to distinguish what was permitted under earlier legislation from what is genuinely undocumented. These situations matter in practice:

• missing or non-matching records of lawful use – the need for retrospective resolution with the building authority (stavební úřad),
• unauthorised alterations – the possibility of retrospective approval or, conversely, the need to restore the original state,
• a change of use (for example, a non-residential space becoming a flat) – a separate procedure with technical requirements,
• a mismatch between actual floor areas and the records – an impact on how units are defined and on shares in the common parts.

This part often decides the permit gate. Until the status is documented, it is not possible to prepare reliable materials for dividing the building or to promise buyers a specific unit.

The technical part: structure, utilities, roof and fire safety

The technical audit answers the question of what condition the building is in and how much it will cost to bring the common parts to a standard that will satisfy buyers and their banks.

Structure and statics

Load-bearing walls, ceilings, foundations and damp are assessed. Cracks, under-dimensioned ceilings or damaged beams may call for a structural engineer's report and remediation that cannot be avoided.

Roof and building envelope

The condition of the roofing, roof frame, flashings, façade and windows. The roof is often one of the largest single items and affects every unit.

Utilities and technical installations

Water, drainage, gas, electricity, risers, lifts, chimneys and consumption metering. Outdated risers or shared supply lines without separate metering complicate the sale of individual flats.

Fire safety

The escape arrangements, fire-separating structures, the condition of shared corridors and staircases, and any necessary measures are checked. Upgrades tend to be costly, especially where layouts or loft spaces are being changed.

Which findings stop the conversion and which make it more expensive

It is useful to sort findings by their impact. The breakdown is indicative; the actual assessment depends on each building.

Legal obstacles generally decide whether you can proceed; technical findings decide at what cost. Both feed into the unit economics: repair costs for the common parts, permits, legal settlement and financing are deducted from the expected sale price. You can get an indicative idea of a building's potential in the potential calculator, but the binding figure is set only by the feasibility study.

The audit output and next steps

The paid feasibility study under the Audit and Plan service delivers its output within six weeks. The owner receives a list of legal and technical findings, an estimate of the cost of resolving them, the unit economics, and a recommendation on whether and how to proceed. It may also turn out that the conversion makes no sense in its proposed form, which is a useful finding before committing larger sums.

If the audit confirms the project makes sense, you can proceed through end-to-end delivery or a partnership. The chosen option is a matter of agreement and of the owner's goals. To discuss your building, use the contact page.

Sales also raise tax questions. Taxation of income from the sale of real estate depends mainly on the holding-period test and on whether the property was used as a home. It is advisable to discuss the specific impact with a tax adviser or the Czech Financial Administration (Finanční správa).