The provisions of sale contracts for property in Hungary are subject to the parties’ free agreement, in addition to the content requirements stipulated in law. However, if the purchaser intends to pay the purchase price or a part thereof from a bank loan, the contract shall be supplemented with the mandatory provisions stipulated by the bank which disburses the loan.
Title to the property in Hungary may be transferred by a sale contract in three ways as follows:
- by transfer of the title to the property immediately, simultaneously with signing of the sale contract;
- by immediate transfer of the title to the property with “holding pendent”, i.e. delaying entry of the
transfer into the real property register up to the end of the period set for granting the registration
permit but not later than up to the end of the 6-month period from the date of submission of the
contract to the real property authority;
- by sale with reservation of title.
The seller should receive a guarantee for payment of the full purchase price so that transfer of the title to the purchaser is being prevented until the payment thereof. Nevertheless, the purchaser must be certain that nothing will prevent registration of his title to the property in Hungary and nothing will prevent him from taking possession thereof after payment of the purchase price.
Therefore, when drafting the provisions of the real property sale contract, efforts should be made by the lawyer in Budapest to achieve that its provisions represent the interests of both parties and settle the problematic situations potentially arising after conclusion of the contract in advance and reassuringly.
Much people think that real property sale contracts are only template contracts in which the relevant details are only updated by the lawyer in Budapest. However, reality is much more complicated. It is doubtless that such contracts should contain such mandatory content elements stipulated in law which should be included in each real estate sale contract. However, the lawyer in Budapest who drafts it will act correctly if he/she satisfactorily reveals the specific circumstances of the transaction, the intentions and other considerations of the parties and compiles the provisions of the contract taking these factors into consideration.
Notwithstanding that the parties have the same objective, their interests are – apparently – conflicting. Therefore, the acting lawyer in Budapest has a prominent role in unifying the various interests by providing proper information to the parties and applying the legal opportunities in a constructive way. By doing so, the parties may all rest assured that the period between conclusion of the real estate contract and its performance will lapse without any special disturbance
If you have any questions relating to sale of real property in Hungary, you may contact us also via our online consultancy column.
