You might be wondering…

• “Can I let a friend use my land without a contract?”

• “Do I really need a written agreement for a holiday home loan?”

• “Who is liable if the borrowed property burns down or someone gets injured there?”

Clients often ask me…

• “I lent my car to a friend who crashed it — am I liable as the owner?”

• “A friend is using my land for free but won’t give it back — what can I do?”

• “I lent a colleague company equipment that broke — can I claim compensation?”

Legal explanation (Civil Code §§ 2193–2196, § 560 Czech Civil Code)

A loan for use is always gratuitous, requiring the borrower to return the same thing and to use it carefully.
However, the type of property determines both the form of the contract and the level of risk.

🧰 Movable property (car, tools, machines, equipment)

• The agreement may be oral, electronic, or written.

• Written form is recommended for evidence (especially to record the condition, purpose, and duration).

• The borrower bears the risk of loss or damage.

• For valuable items, include insurance or a liability clause.

🏠 Immovable property (house, flat, land)

• Here the law requires a written contract under § 560 of the Civil Code,
  because a loan for use of real estate creates a right to hold and use another’s property, a type of right in rem.

• An oral agreement is invalid — the contract must be in written form.

• The contract must clearly specify:

  • the subject of the loan (e.g. house including garage and garden),

  • purpose and duration of use,

  • scope of use (e.g. no subletting or third-party accommodation),

  • responsibility for maintenance, utilities, and operation.

• The lender is liable for defects they knew about but failed to disclose,
  while the borrower is liable for damage caused by improper or negligent use.

Biggest risks and common mistakes

• Invalidity for lack of form – an oral loan of real estate is legally void.

• Confusion with a lease – if any payment is agreed, it’s not a loan for use but a lease.

• Unclear scope – disputes often arise over whether the loan covers gardens, garages, or fixtures.

• Unspecified maintenance or operating costs – frequent cause of conflict.

Step-by-step guide

➤ If you are lending movable property

1. Draft a handover protocol describing the condition and any defects.

2. State the purpose and duration of the loan.

3. Consider insurance or a deductible clause.

4. Upon return, document the condition with photos and signatures.

➤ If you are lending real estate

1. Sign a written contract – without it, the loan is invalid.

2. Specify the exact scope (house, flat, land, equipment).

3. Define who pays for utilities, maintenance, and operating costs.

4. Include a ban on third-party use or subletting.

5. Obtain a written confirmation of return after termination.

Example from practice

A property owner lent a cottage to a friend “for the summer.”
No written contract was signed — only an oral understanding.
When the friend refused to vacate the property, the owner had no proof of the agreed term or legal basis for use.
The court ruled that no valid loan had been created because the agreement was not in writing.

Why written form is mandatory

For immovable property, this is not a formality but a condition of validity.
Without a written contract, no legal relationship arises, and the borrower is merely an unauthorised occupant.
This can also lead to tax or administrative consequences, such as for property use or real estate tax.

Lawyer’s recommendation

The rule is simple:
➡ The greater the value of the thing, the greater the need for written documentation.
For real estate, a written contract is not optional – it’s what makes the loan legally exist.

Checklist:

• Is the contract in written form (for real estate)?

• Is the scope and purpose clearly defined?

• Are maintenance and operating costs allocated?

• Has handover and return been documented?

FAQ

Can I lend a house or land without a contract?
No. For real estate, written form is mandatory. An oral agreement is invalid and creates no legal rights or obligations.

Who is liable if someone is injured on the borrowed property?
It depends on the cause — the lender for undisclosed defects, the borrower for negligence or misuse.

Does a free loan of property have tax consequences?
Yes, it may be treated as a non-monetary income, especially for legal entities. Always check with a tax advisor.