Hungary: Changes in Hungarian Real Estate legislation

01.03.2018

1) Pre-emption Right of the Hungarian State Concerning Real Estate Properties Located on World Heritage Sites

According to the amendment of the Hungarian Act on World Heritage (Act LXXVII of 2011 on World Heritage), the Hungarian State has a pre-emption right on properties which are located in World Heritage sites. The detailed rules on the exercise of the pre-emption right as well as on the list of the exact properties affected by such a right are specified in Government Decree No. 455/2017 (XII: 27.).

The lists of properties contain the lot number of each property, so one can easily check whether a property is subject to this pre-emption right. The pre-emption right can be exercised by the minister for nature protection or the minister for cultural heritage, depending on the basis on which the outstanding value of the World Heritage site has been established. The competent minister shall exercise the right within eight days of receipt of the relevant documents submitted by the present owner of the property. If the minister does not issue a declaration of the exercise of the right by this deadline, the minister is deemed to have waived the right.

2) The General Public Administration Procedure and the Code of Administration Court Procedure as New Laws

Both the Act CL of 2016 on the General Public Administration Procedure (“Administration Act”) as well as the Act I of 2017 on the Code of Administration Court Procedure (“Court Procedure Code”) entered into force on 1 January 2018. These Acts may have an impact on companies’ day-to-day business.

a) The Administration Act

The Administration Act is shorter than the former administration procedure as it only includes general provisions which are common in all proceedings to which Administration Act applies. Some proceedings, such as the proceedings of the Competition Authority, have been withdrawn from the general scope of the Administration Act.

A major improvement to the Administration Act in comparison with the former procedure is the adaptation of summary procedure in which the decision of an authority has to be made within a deadline of eight days. Further new provisions concern the procedures for automatic decisions, when the decision has to be made within one day provided that all the information is at the authority’s disposal, there is no opposing party, the decision requires no deliberation and an automatic decision can be made based on additional legislation.

The former deadline of 21 days for the ordinary authority procedure according to the previous Act has been replaced – in addition to the summary procedure and the automatic decision-making procedure mentioned above – by the overall procedural deadline of 60 days, which serves as an ultimate deadline for making a decision on merit.

With the option of the “one-window procedure”, a case can be completed by a single authority which compiles the decisions of other competent authorities necessary for the decision, and therefore the client only has to communicate with one authority.

According to the new principle of the Administration Act, the main legal remedy against administrative decisions is a claim in the administrative court instead of an appeal.

b) Court Procedure Code

According to the Court Procedure Code, the subject of the procedure before the court is the legality of the activity of the authority (or the omission thereof) aimed at changing the legal position of a person or result therein. Therefore, an individual decision, official measures as well as provisions of general effect can be the subject of the court procedure.

The courts with jurisdiction are the administrative and labour law court as well as the regional court at first instance, and the regional courts and the Curia at second instance. Court proceedings against the decisions made by central administrative authorities have to be decided by the regional courts.

As a general rule, the legality of administrative activity is assessed within the framework of the claim itself. However, the nullity or other ground for invalidity of the activity shall be considered ex officio by the court. The administrative court can either uphold or reverse the decision or oblige the authority to conduct a new procedure. A simplified judgment can also be issued in which no presentation of the facts of the case is necessary. If the claim is unjustified, or no infringement of the plaintiff’s right or rightful interest can be demonstrated, or the infringement had no impact on the case on merit, the claim must be dismissed.