Imre Németh, Tuesday, 5 September 2023
Buying or selling property is a significant event in many people's lives. Therefore, it's essential to minimise the risks of such a transaction,
especially when it takes place in a foreign country. In Hungary, choosing a reliable solicitor who speaks both Hungarian and English is key to a
successful property transaction. Preliminary Contract: The Importance of Written Agreements in Hungary
In Hungary, a
written form is crucial for a valid property purchase agreement. Therefore, a preliminary contract should also be documented in writing. Even if such
an initial contract isn't suitable for registration in the land registry, it can legally enforce the obligations of the other party if necessary.
Deposit: Rules and Consequences
With or without a preliminary contract, it's customary for the buyer to pay a deposit to
confirm their commitment. The rules concerning this deposit are clear and include the procedure in case the contract isn't fulfilled.
Mortgage Purchase: Considering the Bank's Expectations
Often, there isn't enough money available to cover the entire purchase
price, and a bank loan is taken. In such situations, the solicitor must consider the bank's expectations and tailor the contract accordingly.
Mortgage and Sales Restrictions: Dealing with a Burdened Property
It's common for the property being purchased to be under
mortgage. In these cases, it's advisable to ensure that all debts are settled from the purchase price first. Handover of Possession:
Terms and Payment of the Final Purchase Price Instalment
The terms of handing over possession and the payment of the final instalment
of the purchase price are crucial. Typically, it's agreed that the seller doesn't have to hand over the property's possession until they've received
the entire purchase price. Contract Conclusion: Process and Checks
The process of concluding the contract includes
obtaining a land registry extract of the property being purchased and verifying the parties' identities. A diligent solicitor will retrieve the land
registry extract just before the contract's conclusion to ensure no issues arise. Costs: Expenses Associated with Buying or
Various costs are associated with buying or selling property in Hungary. These include the acquisition tax, the fee for the
procedure at the land registry office, the solicitor's fee, and income tax.
Overall, buying or selling property in Hungary is a complex
process with many pitfalls. The biggest mistake buyers or sellers can make is making decisions without a solicitor or choosing the wrong one. An
experienced solicitor can simplify the entire process and help minimise potential risks.