Your broker made a mistake. Who pays for the damage?
If a broker makes a mistake when you sell or buy a flat, the loss can be serious. What clients are entitled to, what to check before signing and what brokers must do.
You trust a broker with selling or buying a flat, often the largest asset of your life. A mistake can cause serious loss, so the law requires brokers to be insured. A client can ask to see the policy. We explain what exactly to check and, for brokers, how to meet the obligation correctly and on time.
What the law requires
A real estate broker (realitní zprostředkovatel), meaning a business that brokers the sale, purchase or rental of property, must be insured throughout its activity (Act No. 39/2020 Coll., Section 7(1)). The insurance covers the duty to compensate the client (zájemce) for harm caused by the brokerage. The client is the person who signed a brokerage contract with the broker (Act No. 39/2020 Coll., Section 2(c)).
- Limit: at least CZK 1,750,000 per insured event and CZK 3,500,000 for multiple events in one year (Act No. 39/2020 Coll., Section 7(1)).
- Deductible (spoluúčast): at most CZK 5,000 or 1% of the payout (Act No. 39/2020 Coll., Section 7(2)).
- Insurer: must be authorised to provide this insurance in Czechia (Act No. 39/2020 Coll., Section 7(2)).
- Half limits, CZK 875,000 and CZK 1,750,000: only for someone who, under a written contract, acts solely in the name of another real estate company or under its brand (Act No. 39/2020 Coll., Section 7(5)).
For clients: what to check
On request, the broker must show you the policy document confirming the insurance contract (Act No. 39/2020 Coll., Section 8(1)). One sentence in an e-mail is enough: “Prosíme o zaslání pojistky podle § 8 odst. 1 zákona č. 39/2020 Sb.” A diligent broker will not be surprised. On the document, check:
- Name and company ID (IČO) of the insured: it must be the party you are signing with.
- Start and end date: the insurance must apply while the broker works for you.
- Limits and deductible against the figures above.
- Whether compulsory broker insurance (povinné pojištění realitního zprostředkovatele) is expressly stated. General business insurance may not cover such losses.
- If the broker has half limits, on request they show the contract with the company they work under (Act No. 39/2020 Coll., Section 8(2)).
One limit applies: the law gives the right to see the policy to the client, meaning the broker's contracting party. A buyer with no contract with the seller's broker may ask, but this duty does not expressly extend to them. If a broker refuses, consider whether to sign with them at all, and ask for the policy before signing.
If the broker causes a loss
Example: the broker does not tell you about a mortgage entered in the land register, even though they must give you information on encumbrances from public registers (Act No. 39/2020 Coll., Section 12(1)). Whoever breaches a contractual duty compensates the resulting damage (Section 2913(1) OZ). So the broker is liable and the insurer covers that liability within the policy. The limit sets how much the insurer pays and does not cap the broker's liability.
- Write down what happened and quantify the loss with documents.
- Send the broker a written notice claiming compensation and ask them to report the event to the insurer.
- Keep the contract, correspondence, land register extracts and the policy.
- If the broker does not respond, consider an attorney, especially for larger sums.
If you suspect a broker is uninsured, you can notify the Ministry for Regional Development (MMR), which supervises these duties (Act No. 39/2020 Coll., Section 20(3)). Lack of insurance carries a fine of up to CZK 1,000,000 (Act No. 39/2020 Coll., Section 21(2)). The law does not list missing insurance as a ground for the contract being invalid.
What else you can require from a broker
- A written contract stating the subject, price and commission; without these it is invalid and only you can invoke that (Act No. 39/2020 Coll., Section 9(2) and Act No. 39/2020 Coll., Section 10(3)).
- A land register extract no older than 3 working days, by the signing day at the latest, for a person buying or renting; otherwise you can withdraw within 14 days (Act No. 39/2020 Coll., Section 11).
- Information on encumbrances and on the commission paid by the other party; otherwise you can withdraw (Act No. 39/2020 Coll., Section 12).
- A consumer cannot be obliged to conclude the purchase or lease, or to pay by bill of exchange or cheque (Act No. 39/2020 Coll., Section 14 and Act No. 39/2020 Coll., Section 16).
- An exclusive contract with a consumer lasts at most 6 months (Act No. 39/2020 Coll., Section 17(4)); for an open-ended contract the notice period is at most 1 month (Act No. 39/2020 Coll., Section 18).
- An advance on commission from a consumer is at most two thirds (Act No. 39/2020 Coll., Section 19(3)).
- A contract signed off-premises or at a distance: a consumer can withdraw within 14 days (Section 1829(1) OZ), unless the service has already been fully provided with their express consent and after being informed (Section 1837(a) OZ).
For brokers: how to do it correctly
You file a counterpart or officially certified copy of the insurance contract with the Ministry for Regional Development within 10 working days of concluding it (Act No. 39/2020 Coll., Section 7(4)). The same applies to every change of limit or deductible. You also inform the ministry of any termination or withdrawal. Failure is an offence with a fine of up to CZK 100,000 (Act No. 39/2020 Coll., Section 21(2)).
- Where: according to the MMR's guidance (portal.gov.cz, “Kontrola povinného pojištění realitních zprostředkovatelů”, S8824, checked on 5 November 2026), ideally by data box 26iaava; also the electronic form, e-mail with a qualified signature, post or in person. There is no fee.
- What to attach: the electronic contract from the insurer, or the policy or certificate; if it is only a proposal, also proof of payment.
- Cover letter: your preferred contact and, for a company, your role, for example managing director (jednatel).
- Watch the date: with some insurers the contract arises only when the proposal is paid. The deadline runs from conclusion of the contract, so check the date in the contract.
- Changing the limit? The insurer may issue a new contract instead of an amendment. Then you file the new one and make sure cover does not lapse.
- No other authority receives the policy. You inform the trade licensing office only on the first custody of money (Act No. 39/2020 Coll., Section 4(4)).
We recommend keeping the policy PDF ready so a client gets it at once, and putting the end of the insurance period in your calendar. Take care in advertising too: write “we are insured” only about activities the contract really covers. Translations, interior design and other services may fall outside the compulsory insurance.