HUNGARY Law and Practice Contributed by: Attila Ungár and Júlia Várkonyi, Lakatos, Köves & Partners
to the permitted use, the landlord is usually enti - tled to terminate the lease. Hungarian law protects neighbours against dis - turbances caused by, for example, activities resulting in excessive noise, smell, sound effects or air pollution. In such cases, other tenants may request possession protection from the notary. 6.13 Restrictions on the Use of Real Estate Tenants’ rights to make alterations to the leased premises will depend on the parties’ agreement. Usually, such tenant requests must be submitted to the landlord for prior approval. The landlord may grant fit-out or refurbishment-related con - tribution to the tenant – ie, the works are thus partially covered by the landlord. In some cases, the tenant may change decorative elements not affecting the structure. 6.14 Tenant’s Ability to Alter and Improve Real Estate Act LXXVIII of 1993 contains specific rules for the leasing of residential buildings and premises. In general, the same legislation applies to the lease of office spaces, commercial premises or logistics parks. The main source of provisions is the lease agreement itself. 6.15 Specific Regulations It is common for the landlord to terminate the lease if liquidation proceedings or involuntary deregistration proceedings are ordered with binding force against the tenant or if the tenant files a request for voluntary winding-up (or even if such proceedings are threatened). Under Hungarian law, liquidators may terminate any contract concluded by the debtor (includ - ing leases), except for leases of natural persons related to residential properties. In addition, if a
tenant files for bankruptcy, the landlord is pro - hibited from terminating the lease during the bankruptcy moratorium. 6.16 Effect of the Tenant’s Insolvency Tenants are generally required to provide land - lords with a cash deposit, a bank guarantee or a parent/group company guarantee, or to ensure a suretyship. The amount of security is usually equal to three to 12 months’ (gross) rent plus service charges. In order to satisfy claims of unpaid rent and addi - tional costs, landlords also have statutory lien over tenants’ assets located within the leased premises. It is also common to request a so-called evic - tion declaration from tenants issued in the form of a notarial deed, under which tenants may be forced to leave the leased premises without a court procedure if the lease agreement termi - nates for any reason. 6.17 Right to Occupy After Termination or Expiry of a Lease According to the Hungarian Civil Code, if the tenant continues to use the leased premises after the expiration of the definite term and the landlord does not challenge this, the term of the lease becomes indefinite and may be terminated by ordinary termination. However, this possibility is usually excluded in commercial leases. If the tenant does not leave the leased premises by the effective termination date, the landlord is entitled to a so-called usage fee in addition to general compensation claims under the Civil Code. According to the law, the usage fee equals the monthly rent. However, the parties usually stipulate two to three times the amount of the rent in commercial leases. As a final solution,
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