HUNGARY Law and Practice Contributed by: Attila Ungár and Júlia Várkonyi, Lakatos, Köves & Partners
6.23 Remedies/Damages for Breach In the case of early termination due to the ten - ant’s breach, it is standard that the tenant must pay rent (and service charge) for the remaining term; however, in practice it is rare that land - lords request or could enforce such payment for more than 12 months (6–12 months is usual). The actual payment request also depends on the incentives (rent-free period, fit-out contribu - tion, etc). Landlords are interested in re-letting the property as soon as possible at least on the previous rent level, so the tenant is required to cover the period until rent income is ensured from a new tenant, which is primarily covered by the security provided by the tenant at the start of the lease. Landlords may enforce statutory liens on assets owned by the tenant located within the leased premises, but this is often challenged by the ten - ant. Landlords may request the issuance of a payment order to the tenant by the notary pub - lic – ie, if the tenant fails to dispute the request within the statutory deadline, the landlord’s pay - ment request becomes enforceable (if the tenant disputes the payment request, the process may be continued before the civil court). It is also an option to enforce claims by initiating a liquida - tion proceeding against the tenant, but this is not a standard route, as it requires effort from the landlord and the settlement of claims is not ensured. 7. Construction 7.1 Common Structures Used to Price Construction Projects Construction contracts typically set out a fixed contract price for the scope of work covered (ie, the contract price is determined before the fulfil - ment of the work). Unit/itemised prices are also
commonly used, which means that the contrac - tor is paid based on the effective fulfilment (ie, the contract price is determined following the fulfilment of the work. 7.2 Assigning Responsibility for the Design and Construction of a Project If a separate architectural services firm is involved, such firm (designer) will usually be responsible for obtaining the building permit, while the general contractor is responsible for the construction and obtaining the occupancy permit. Engineering, procurement and construction (EPC) agreements under which the contractor is responsible for both design and construction are also widespread. In the case of EPC agree - ments, the contractors undertake higher respon - sibility for budget, milestones/completion dead - lines and quality/remedying defects. Engineering, procurement and construction management (EPCM) agreements are also com - mon, whereby the project manager is responsi - ble for the co-ordination of the entire construc - tion project (often including the design), although the main responsibilities remain with the con - struction contractor or other (sub)contractors. 7.3 Management of Construction Risk Limitation of liability clauses, contractual warran - ties, various forms of insurance, liquidated dam - ages and parent company or bank guarantees covering performance and maintenance periods are commonly used to manage construction risks. In addition to any contractual warranties/ guarantees, statutory minimum warranty/guar - antee periods apply to different types of built-in materials/superstructures.
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