Lessors shall guarantee that the thing leased out is at the time it is transferred and will be for the entire duration of the lease period suitable for proper use (implied warranty) and that the lessee exercises his rights undisturbed during the term of the lease (warranty of title). Under the law in Hungary, lessees shall be entitled to use things properly and in accordance with the contract and shall be liable for all damages resulting from improper use or non-contractual use. Minor expenses required for the maintenance of a thing shall be borne by the lessee; other expenses as well as public duties in connection with the thing shall be borne by the lessor. The lessee shall be entitled to claim reimbursement for the unavoidable costs he incurs because of the thing.
A lease contract is terminated:
- upon the expiration of the contract term in the case of definite-term lease contracts;
- upon occurrence of the conditions defined in the contract;
- if the thing is destroyed;
- in the case of failure to make lease payments, with immediate effect;
- with a 15-day notice.
Upon termination of the lease, the lessee shall return the thing to the lessor.
Residential lease is one of the most typical kinds of lease. It is valid only if it is incorporated in writing. Although nothing in law in Hungary requires that the services of a lawyer or notary public should be used therefor, it is recommended to do so in any case because several future potential problems could be prevented if the parties conclude the contracts in possession of proper information.
Some examples:
- At the time when the real property is handed over for the first time or when the relevant contract is
terminated, a joint site visit needs to be conducted recording its condition in order to prove breach
of the contract (if any) (damaging, “down-at-heel” condition, furniture and equipment stolen).
- If the contract was concluded with participation of a lawyer, the lessee may reasonably suppose that
the lessor would use legal assistance if the lessee fails to pay and it could be a sufficient retarding force
against non-payment.
- Few people are aware of the fact that if the lessee fails to pay the rent or to leave the unit, it is the
lessee (i.e. the party on the property) who is protection under the law in Hungary!
- Incorporation of a contract in a public document by a notary public renders the provisions of the
contract immediately enforceable in the case of its breach.
- It is also a less well-known fact that the lessor (sublessor) of a real estate is entitled to pledge the items
of the property on the leased units up to the amount of the rents in arrears and their charges.
- If a unit is let on lease by a private individual, the lessor shall pay a tax on it.
If you have any questions relating to lease contracts under the law in Hungary, you may contact us also via our online consultancy section.
