Ownership registration in electronic real estate registration process

02/03/2022

Recently, our partner office received the first registration of ownership based solely on electronic documents. As is widely known, it is anticipated that from 1 February 2023, the main rule will be online administration in property registration procedures.

Until the 1st of January 2021, the Real Estate Registration Authorities did not have a formal opportunity to receive and process applications submitted electronically; after an amendment to a piece of legislation, they can no longer only act on paper. In this case, only one original, electronically signed document needs to be submitted in the proceedings, there is no requirement to submit two originals and one authenticated copy, as in the case of paper-based proceedings. The electronic real estate registration procedure explicitly facilitates the execution of the contract in cases where, for example, the client or the other party is abroad.

The procedure still requires that the attorney and all contracting parties shall be able to sign the contract or legal declaration related to the property electronically. In the future, attorneys and legal advisers can freely initiate the proceedings by submitting electronically signed and countersigned documents.

A brief introduction to the new Code of Civil Procedure (Novella) which simplifies civil litigation

Three years ago, on 1 January 2018, Act CXXX of 2016 on the Code of Civil Procedure entered into force, renewing civil litigation in Hungary. The new procedural law, among other things, introduced the principle of concentration of proceedings and emphasized the responsible litigation of the parties. The main aim of the new Act was to shorten the duration of litigation, in line with European trends.

Based on the procedural experience and decisions of the Constitutional Court of Hungary after the entry into force of the new Code of Civil Procedure, it became necessary to simplify and make more flexible the rules of procedural law. To this end, Act CXIX of 2020 (Novella) amending Act CXXX of 2016 on the Code of Civil Procedure was enacted, and it entered into force on 1 January 2021. In this article I will outline some of the provisions of this Act.

The primary goal of the new Amendment is to facilitate access to courts while the principle of concentration of proceeding is maintained and the benefits of the split procedural structure are realized. The Principle of concentration of proceedings is based on Section 3 of the Code of Civil Procedure, which stipulates that the court and the parties shall strive to make available at the appropriate time all facts and evidence necessary to deliver the judgment, so that the legal dispute can be adjudicated, if possible, during a single hearing.

According to the split procedural structure, in the preparatory phase of the litigation, the parties must provide the necessary evidence as well as their legal reasoning, while the court must indicate any inconsistencies and deficiencies that hinder the decision-making.

As a general rule, the rules introduced by the Amendment will be applied to all cases pending on 1 January 2021 with the exception of the rules on material or territorial jurisdiction which will be applied in the cases filed after 1 January 2021.

The Amendment simplifies the mandatory content elements of the statement of claim. From now on, it is not obligatory to indicate in the statement of claim the identity of the defendant other than his or her name, role in the procedure and place of residence or domicile.

From 1 January 2020, in the case of a legal person, the court may not request the party to certify the data published in a publicly certified register established by law. This rule is applicable only to legal entities registered in publicly certified registers, for instance, companies or condominiums. In the case of unregistered legal entities, the court has the right to request the party to certify such data.

From now on, even in case of a party acting with a legal representative, the court will be obliged to call the party to rectify the deficiencies in the event of a formal or substantive deficiency in the statement of claim. This modification is justified by the fact that applications submitted by parties acting with a legal representative were often rejected by the court without giving any chance to rectify the deficiencies.

Any deficiencies in the application must be fully indicated by the court in an order, and if the plaintiff has rectified all the identified deficiencies, the court must accept the application.

This is an important modification because in the past the court could call the parties to rectify deficiencies more than one time and rejected the application if one of the deficiencies was not rectified.

The plaintiff will now be notified by the court if his or her application has been accepted and declared suitable for litigation.

According to the Amendment, in actions related to personal status, such as action for the establishment of parenthood or action related to parental custody, the interests of the children are given greater emphasis.

The modifications highlighted above are only a small part of the Amendment. In conclusion, it can be stated that the rules entered into force on 1 January 2021 will facilitate civil proceedings on the part of both the plaintiff and the defendant.

dr. Csanád Kandikó

Legalmondo

We are happy to announce that our guideline in the subject of „international debt collection in Hungary” has been published on the Legalmondo website. If you are interested you may find the guideline here:

https://www.legalmondo.com/product/pratical-guide-international-debt-collection-hungary/

Legal nature of the home office and interesting facts from practice

26/11/2020

The situation caused by the coronavirus also posed new challenges to organized work, as there is an unprecedented demand for work in the home office, ie in the employee's home.

Working from home is considered by many to be teleworking, although this temporary transition to the home office does not correspond to the concept of teleworking as defined in the Labor Code. According to Section 196 of the Labor Code, ‘Teleworking’ shall mean activities performed on a regular basis at a place other than the employer’s facilities, using computers and other means of information technology (hereinafter referred to collectively as “computing equipment”), where the end product is delivered by way of electronic means. In the employment contract the parties shall agree on the worker’s employment by means of teleworking. In line with the above, the conceptual element of teleworking is, on the one hand, that the employment relationship is basically established specifically for the purpose of teleworking, and, on the other hand, that it is regularly performed in this way.

Conceptually, working in a home office can correspond to a statutory definition of employment in a workplace other than an employment contract; Pursuant to Section 53 of the Labor Code, Employers shall be entitled to temporarily reassign their employees to jobs and workplaces other than what is contained in the employment contracts, or to another employer. Accordingly, if the employee's employment contract indicated the employer's registered office or place of business as the place of work and the employee carries out from home on the employer's instructions, then in this case the employment takes place at a different place from the employment contract. The duration of employment may not exceed a total of forty-four working days or three hundred and fifty-two scheduled hours during a calendar year.

In connection with employment in the home environment, in a workplace other than an employment contract, we would like to highlight the following points of interest;

As far as the schedule is concerned, as a general rule, in the case of home office work, the employee's work schedule is non-compulsory, the employee works part-time, and assigns his / her own working hours. However, casual working hours do not mean that the employee does not need to be available at specific times, such as a meetings or conference calls.

With regard to the control of work, it can be established that basically the employer determines the method of control. It must be stated in advance, what period of time may have elapsed between the notification and the commencement of the on-the-spot inspection, that is to say, at the worker's home. Obviously, the employer or the nominee cannot show up in the colleague’s home unexpectedly. Control should not be a disproportionate burden on the employee, but it is also true for the employee’s family members if the work takes place in their own home.

Working remotely can also incur more serious work-related costs, such as telephone or Internet costs, or even special equipment or printing costs for the job, if the nature of the work requires so. Under the general obligations relating to the employment relationship, the employer is obliged to reimburse the employee for the costs reasonably incurred in performing the employment relationship.

With regard to the rules described above, it is important to emphasize that working in a home environment should not in any way lead to a violation of the employee's rights, so as a typical example an employee should not be required to take paied holiday leave during home office, shall not be required to take three shifts instead of the previous one, or work on weekends if he or she has not previously worked in this way. The 44-day time limit for employment at a place other than the employment contract applies only to the unilateral order from the leadership, ie if the employer offers the home office but does not make it compulsory and the employee accepts the possibility, in principle by mutual agreement of the parties. This way does not reduce the 44 working day annual limit. Flexible application of working from home can be a temporary solution until the end of the epidemic situation or until the physical location of the workplaces shall be provided.

Financial trends in 2020

03/11/2020

Recent data from the hungarian Ttrade Statistics Office show that one-sixth fewer people took out housing loans in the first half of this year than a year earlier. In summary, however, there was no substantial decline; 422 billion hungarian forints were disbursed in housing loans in the first half of the year, which is only 1% less than a year earlier, which means that the average loan amount per transaction increased. In this area, loans taken out for expansion and modernization behaved in the opposite way: they fell by a third of their total amount. Loans for construction increased by 5%, while loans for the purchase of second-hand flats fell by the same amount, while the population took out 15% more loans for financing new housing. In total, this means an average loan of HUF 13.3 million for the purchase of new flats for residential consumers in the first half of the year, while the same was HUF 10.5 million for used flats.

As is well known, until the 31th December 2020, the repayment moratorium was general, applied by credit institutions to contracts already existing on 18 March 2020, among both retail customers and businesses.

The Act 107 of 2020 was adopted on the extension of the repayment moratorium. The law introduced the following innovations:

• the unemployed, individuals expecting and raising children, pensioners and public workers can benefit from the moratorium on repayment with the same conditions until 30 June 2021 as before;

• regarding the companies; only businesses in financial difficulties can take advantage of the option from the 1st of January, these firms - unlike retail customers, with whom their bank agrees electronically on eligibility - must send a separate application form to the credit institution;

• those who fail to extend the repayment moratorium shall fulfill a loan cancellation ban until the middle of next year.

Regarding the procedure of credit institutions, the experience of our Law Firm is that due to the epidemic situation, the personal customer turnover has significantly decreased and the demand for digital banking and electronic communication has increased. Taking this in mind, banks are trying to catch up with their infrastructure to the changed circumstances. Generally speaking the crediting procedure has not become significantly more cumbersome, as many previous acts can be resolved electronically with the participation of a legal representative. It can also be stated that the willingness of banks to provide loans has not decreased and may strengthen further at the end of the year.

Autumn real estate market overview

22/10/2020

On the 14th October, as part of the Home Creation Program, it was announced that the state housing support system would be expanded with several new elements from the 1st of January 2021.

One example is the reduction of the VAT on housing construction from 27% to 5% which could give a new swing to the appetite of purchasing newly built homes.

The plans also include the introduction of the state subvention of up to HUF 3,000,000 for housing renovations, as well as the remission of the remunerated property transfer tax for flats purchased with the family home creation discount (CSOK.) The exact criteria for the practical use of these elements of the program are yet to come.

Partly due to these measures, the number of interest in purchasing new homes and houses in the first three weeks of October was 40 percent higher than a year earlier. Thus, the 10-40 per cent drop in demand, which began in March and peaked in April in the uncertain situation surrounding the coronavirus epidemic, and the 10-30 per cent decline in advertisements posted during this period have changed significantly. The analysis of ingatlan.com also shows that in the first three weeks of October, the supply of second-hand flats decreased by 8 percent compared to a year earlier, and buyers can now choose from 142,000 residential real estate ads. The demand for second-hand housing fell by 19 percent. Preliminary data of the trade statistics office show that second-hand flats became 6.3 per cent cheaper on an annual basis in the second quarter.

According to real estate market experts, the real estate market is likely to show a volatile face in the coming months, given that the epidemic situation is still uncertain and that many families, - whom are to buy and sell their properties- are currently waiting for the expansion of the above-mentioned state housing support system from 1 January 2020. Nevertheless, we can reasonably expect that no further rise in prices is expected in the real estate market.

Congress of Local and Regional Authorities of the Council of Europe in Strasbourg - 2019

15/11/2019

Congress of Local and Regional Authorities of the Council of Europe in Strasbourg - 2019

Our colleague dr. Csanád Kandikó attended the 36th and 37th Session of the Congress of Local and Regional Authorities of the Council of Europe in Strasbourg as the youth delegate of Hungary. During his mission, he was involved in commenting on the draft resolutions and recommendations submitted to the Congress. In his intervention on use of minority languages he emphasized that in the policy of the Congress special attention should be given to the autochthonous national minorities.

Tourists in Budapest are more than in Beijing in all 2018

11/02/2019

Tourists in Budapest are more than in Beijing in all 2018

The number of tourists visiting in Budapest has reached four million, and now the city rivals the most popular Asian towns by the information of the Euromonitor International Top 100 City Destinations 2018.
Budapest closed a successful year according to the results of Euromonitor International, with the number of visitors reaching four million this year, which means a 9.1 percent increase. This number was only three million in 2017.
With its four million visitors, Budapest is at the level of European cities such as Munich, St. Petersburg or Jakarta. The Australian Sydney preceded the Hungarian capital by only 150 thousand people.

Budapest was also ahead of Beijing

Based on this year's figures, Hungary has also surpassed Beijing, as the number of foreign travelers has increased from 3 million 670 thousand to 4 million, while 3 million 676 thousand tourists visited Beijing from other countries.

There could be a historical record in Budapest

From 2010 until 2017, the number of tourists increased by 51 percent, at the same time tourism revenues almost doubled. A 1 percent increase in GDP was the result of a 10 percent increase in the gross national product. According to the statistics office, in October 2018 the number of domestic tourists increased by 10 percent and the number of arrivals from the United States to Budapest increased by 30 percent.

Dr. Lorenzo Amato

Budapest Elected Best European Destination for 2019

07/02/2019

Budapest Elected Best European Destination for 2019 

Budapest has been voted the #1 European destination for 2019 from  20 “must-see” locations that made the finalists’ list of contenders for the coveted title organized by European Best Destinations (EBD).

For its 10th edition, the competition collected a record of more than 500,000 votes for the trendiest destinations in Europe that will be promoted throughout the year to millions of travelers - and will be authorized to display the title "European Best Destination" in their marketing.

Here the first 10th places:

1. Budapest, Hungary

2. Braga, Portugal

3. Monte Isola, Italy 

4. Metz, France   

5. Poznan, Poland 

6. Malaga, Spain 

7. Geneva, Switzerland 

8. Cavtat, Croatia 

9. Bratislava, Slovakia 

10. Sainte-Maxime, France 

Dr. Lorenzo Amato

Real Estate Price Growth in Budapest: Fastest in Europe, 3rd Worldwide - 2018

04/02/2019

Real Estate Price Growth in Budapest: Fastest in Europe, 3rd Worldwide - 2018

Budapest shows the highest 12-month residential property price growth in Europe, while ranking behind only Xiʼan (China) and Ahmedabad (India) among 150 cities on the world stage – based on Knight Frankʼs report entitled “Global Residential Cities Index – Q3 2018”.

The Hungarian capital registered residential price growth of 19% from Q3 2017 to Q3 2018. The top ten features only three other European cities: Porto (Portugal), with a growth of 16.6%, Rotterdam (Netherlands) with 15.7%, and Amsterdam (Netherlands) with 13.1%.

Dr. Lorenzo Amato

Real Estate Market in Budapest - 2018

19/06/2018

Real estate market in Budapest - 2018

Real estate prices have been growing in Budapest for years.
According to several Hungarian real estate agencies, everybody should calculate with more than 1 milion HUF (3.150 Euro) per square meter by 2020 in Budapest downtown.

This is because investing in real estate in Budapest becomes more and more attractive: the real estate prices in Budapest have doubled since 2014. In fact, the average sum per square meter was 420 thousand HUF (1.321 Euro) then. Last year this sum increased to more than 788 thousand HUF (2.500 Euro). According to the latest data, growth has not stopped. In 2018 the average square meter price reached 900 thousand forints (2.830 Euro).

In these days, 13% of the flats was already more expensive than 1.1 mil. HUF (Euro 3.450). Motivation was mostly the intention to invest, but it sometimes happened that customers changed their small flat to a bigger one.

Growth of average sq. meter in 5th District – The Chart below is configured by “Duna House”.

*Estimated price

Dr. Lorenzo Amato - Law Firm Balint Halmos

Hungary - Legal changes from 1st January 2018.

19/01/2018

Hungary - Legal changes from 1st January 2018.

Family Law and Taxes

Increase in general child-care benefits as well as children-care benefits for university students or graduates, added support for mortgage holder and the option of relief on students loans repayments.
Eligible families are entitle to a maximum of gross of 193.200 ft. (622 Euro) in child-care benefits.
Female university students or graduates are eligible for an extra year of child support up to the second child’s second birthday.
Students enrolled in a bachelor’s programme will be eligible for 96.600 forints in support and students enrolled in a master’s programme for 126.350 forints.
Tax benefits for families with two children rise, leaving them with an extra 5.000 forints of monthly disposable income.
The government will pay off 1 million forints of a mortgage after every third and subsequent child and forgive half the student loans of women with two children and the entire debt of those with three or more children. There is no upper age limit for children born earlier so the mortgage debt can be reduced even if the older child has already turned 18 years old.
The new year also marks the start of a new scheme dubbed Umbilical Cord, targeted at Hungarians whose children are born abroad. Families who fall into this category will be eligible for a one-time maternity allowance of 64.125 forints as well as a “baby bond”. Benefits also rise for Hungarians caring for minors with disabilities. The basic carer’s allowance rises by 5 percent and families who have been caring for children with prolonged illnesses for at least 20 years will be eligible for a new kind of benefit.

Penal Code - Penal Law

Under the amended Penal Code, sex crimes against children below the age of 12 are punishable by 10-20 years imprisonment. 

Administrative Law

The law on administrative procedures, which concerns legal disputes between Public Administration bodies and private entities, also comes into effect.

New Civil Procedural Code

A new civil procedural code also enters into force. The Justice Minister declared that the new Procedural Code aims to speed up lawsuits. It also sets new rules for class action lawsuits.

For more info please contact Law Firm Balint Halmos – www.legal-society.com
Dr. Lorenzo Amato – Dr. Balint Halmos

The new Company Gateway for Business Organizations in Hungary

05/09/2017

The  new Company Gateway for Business Organizations in Hungary

What the Company Gateway is about?

For all Business Organizations, the use of the Company Gateway is required from 1° January 2018.
The official administration of the business entities, their contacts with the state administration bodies, their everyday communication, will have to be carried out electronically through the Company Gateway. The Corporate Gateway aims to bring possible the electronic contact between the Authorities and the business associations, reducing, and later triggering the paper-based contact and postal delivery of the official documents.

How to process the registration for the Company Gateway?

For the purpose of managing the Company Gateway, a natural person authorized to do so (Business Gateway) or any other user registered by the business organization is eligible for this Business Organization, but only one Company Gateway can be used by the business organizations.
Registration of an enterprise can be initiated online. The online, fully automatic registration of the Company Gateway can only be applied by the companies, registered in the company register. A further pre-requisite for online registration is that the company representative itself perform the registration on his own behalf.
Both the Registrar and the Business Rapresentant are required to identify themselves by means of an identification service provided by the State (Customer Gateway, Partial Telephone Identification, Electronic Identity Card).

Until when the registration has to be done?

The service of NISZ Zrt. Company Gateway starts on the 1st December 2017. Although the deadline for the registration can be fulfilled by the 30th August 2017, until the 31th December 2017 the registration can be fulfilled without any legal consequences.

Dr. Rózsa Boda – Dr. Lorenzo Amato - Law Firm Balint Halmos