Condominium developments, industrial park projects and solar power plant projects are just some examples of developments that, in many cases, cannot be implemented without the inclusion of agricultural land into the inner area of a municipality and, where applicable, its withdrawal from agricultural cultivation. While the conditions for inclusion into the inner area used to be relatively well-defined and predictable, a new element has recently been introduced into the process over which developers have no real control. For the time being, legal practitioners are still considering how this new risk can best be managed.

A lease may look like a relatively straightforward transaction. In practice, however, some of the most costly landlord-tenant disputes arise not from the amount of rent, but from issues that received too little attention when the agreement was signed: who was actually entitled to lease the property, when a fixed-term lease can be terminated, who bears repair costs, what happens to the security deposit if the property is sold, or who pays to reinstate the premises at the end of the term.

At the beginning of the summer, the regulations governing the land registry in Hungary were amended, introducing significant changes affecting owners of so-called garden plots in the outskirts ( in Hungarian: “zártkerti ingatlanok”), such as weekend houses, garden homes, and similar plots. The practical benefits, however, will largely depend on the location and on whether the local municipality allows their application.

The new Real Estate Registration Act that came into effect in January restructured the system for registering properties purchased in installments or subject to conditions, and introduced the so-called buyer's right. However, since January, there has been considerable debate regarding whether the buyer's right can be registered on properties involved in bank financing (and therefore under alienation and encumbrance prohibition). A recently enacted amendment to the law, however, resolves this issue.

Buying or selling real estate in Hungary is a private agreement between a seller(s) and a purchaser(s). The process is governed by strict form and content requirements and overlooking them may easily put the entire transaction at risk. Understanding these rules in detail — from formal signatures and escrow arrangements to the special restrictions applying to agricultural land — is the key to ensuring that every property transfer is not only valid on paper, but also secure and enforceable in practice.