HUNGARY Law and Practice Contributed by: Attila Ungár and Júlia Várkonyi, Lakatos, Köves & Partners
1. General 1.1 Main Sources of Law
estate market. The war and the corresponding market changes have had a considerable impact on the supply of raw materials (such as steel or petroleum-based materials), transportation and energy, and significantly increased operational costs for construction companies, which started to revise bids and contracts to include escalation or force majeure clauses in order to address the risk of fuel surcharges, labour impacts and sup - ply chain disruptions. Greenfield investments in industrial properties/ new developments remain active due to the entering of Chinese, Korean and Japanese man - ufacturers in relation to the EV manufacturing/ related battery industry. Substantial state sub - sidies are available to attract such investments. The office market is still waiting to see how the home office/physical office balance will end up, but managements of tenants are making efforts to drive back their workforce, and the general expectation is that the home office trend has reached a steady level and will not drastically alter office occupation ratios going forward. Office vacancy rates have been increasing; new office stock has come to the market in 2023/24, but there will be a gap in the pipeline due to the limited number of ongoing constructions. ESG requirements are becoming more important for investors, financers and tenants. New develop - ments obtain the appropriate green certificates, and it remains to be seen how existing office stock owners will address this. The logistics market saw substantial growth dur - ing the last years up until 2023, but since then speculative land acquisitions and developments have only been taking place if there are commit - ted new tenants.
The foundations of the general protection of real estate rights are provided by the Fundamental Law of Hungary, according to which every per - son has the right to property. The main source of Hungarian real estate law is Act V of 2013 on the Civil Code. Real properties are registered in the centrally organised land registry, which is regulated by Act C of 2021 on Real Estate Registration and by Government Decree 179/2023 (V. 15.) on the Implementation of Act C of 2021 on Real Estate Registration. Additionally, Act CXLVI of 2021 regulates certain issues related to the prepara - tion for the electronic land registry procedure, the implementation of which is currently in pro - gress. Other legislation relating to real proper - ties includes laws on agricultural land, leases of residential properties, construction of buildings, monument protection, condominiums and taxa - tion. 1.2 Main Market Trends and Deals The commercial transactional real estate market slowed substantially after the start of the war in Ukraine in 2022, and activity has not returned since then (similar to other CEE countries). The reasons are multiple (country risk, limited exit possibilities from assets, high interest rates, etc), but the most important is the lack of price adjust - ment compared to Western European markets. It is difficult to determine yields due to the limited number of transparent transactions. Construction activity reduced substantially after the start of the war in Ukraine due to high prices for raw material and energy, the lack of new state projects in the absence of EU sources and the uncertainties of the commercial transactional real
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