Czech Building Act: Construction Companies Face Rising Risks from Non-Compliance

Stricter regulations, higher penalties, and growing demands for transparency are raising the costs of non-compliance in the construction sector, according to industry experts. The new Czech Building Act, tighter European climate rules, and more frequent inspections mean that violations in areas such as labour, safety, environmental protection, and fire standards can now carry severe financial and reputational consequences.

“Compliance today is no longer about minimal adherence to basic standards. Companies must be able to demonstrate precise fulfilment of complex requirements, backed by clear documentation and transparent processes,” said Adam Heres Vostarek, Regional Manager at PlanRadar, a platform for digital documentation and communication in construction.

Areas of Highest Risk
• Employment and occupational safety: In 2024, labour inspectors carried out nearly 19,000 inspections in the Czech economy, issuing 5,595 fines totalling CZK 469 million. The State Labour Inspection Office also imposed over 830 fines worth CZK 164 million for illegal employment. Construction companies, due to heavy reliance on subcontractors, face fines of up to CZK 10 million and potential criminal liability in cases of serious breaches.
• Building regulations: The new Building Act introduced tougher oversight of all stages of construction. Offences such as building without a permit or violating zoning rules can result in fines up to CZK 2 million, or CZK 4 million in protected areas, with the added risk of demolition orders.
• Environmental compliance: Violations under the Waste Act can lead to fines of up to CZK 25 million. The Czech Environmental Inspectorate can also halt projects posing environmental risks, causing both financial losses and long-term reputational damage.
• Fire safety: Fines range from CZK 500,000 to CZK 1 million depending on project risk. Beyond administrative penalties, company managers, designers, and site supervisors may face criminal prosecution if violations lead to accidents.

Strategies for Compliance

Industry experts highlight that many breaches stem from fragmented information and reliance on paper records. Digital tools and data-driven systems can mitigate risks by:
• Embedding safety into corporate culture, engaging employees in compliance processes.
• Using analytics to identify risks, monitor schedules, and predict delays.
• Ensuring continuous monitoring throughout the project lifecycle, rather than compliance checks only at final stages.

“Compliance protects employees, projects, and reputation. When integrated effectively, it also enhances productivity and builds trust with both regulators and investors,” Vostarek said.

Source: PlanRadar