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03 January 2022
roadmap
hungary

A land registry that aims to protect investments in the 21st century

Aside from some temporary regulation, Act C of 2021 on Land Registration will enter into force on 1 February 2023, introducing several practical novelties for private citizens and companies as well as lawyers.

The proven solutions of the previous regulation will remain while a brand-new electronic database will be developed and the land registry procedure will be fully electronic, reducing the procedural time and costs.

Automatic decision-making is possible for simpler applications by which ownership can be registered within an hour. The current law creates a 21st century land registry procedure in Hungary, supported by a 21st century IT system. The complete land registry administration will be digitised and finally brought in line with modern requirements.

The new system addresses the following issues:

Speed

Right now the procedure slows down if the applicant does not submit the application to the land registry where the property is located. Thanks to electronic administration, the submission is registered immediately and can be arranged by any land registry in the country regardless of the location of the property.

Ranking

The relationship of an entry relative to others is determined by its rank. With a land registry application, a rank is established with a document on which the registration is based (e.g. sale and purchase agreement). It is possible that despite a formal defect which cannot be identified at first sight the administrator registers the side-note and the potential deficiencies may only be discovered after the actual verification process. According to the new regulation, the application data are immediately verified by an IT system, and only appropriate and formally complete applications will be automatically side-noted.

Priority

In terms of order of priority, problems were caused by applications signed on the same date, and because they related to the same property, they were submitted on the same day and to the same land registry. In an electronic procedure, priority will no longer be based on the same day, but on the same second. Since the IT system will register the receipt of files to the second, it will exclude the possibility of files being submitted at the exact same time.

Pending procedure

In most cases the registration application is handled by a pending procedure, for a period not exceeding six months from the submission of the application. Under the new legislation there will no longer be a pending procedure, but the purchaser's right will be recorded on the title deed. If the purchaser's right was registered on the title deed, the land registry will automatically suspend the ranking of any upcoming submissions.

Data updates

The owner's and other rightsholders' data, are often out of date on the title deed, which causes a problem identifying the property and the rightsholders. Based on the upcoming regulation, the IT system connected to the land registry will automatically update the data on the property and the rightsholders.

Recording of lawsuits

Transaction safety requires that lawsuits must be recorded on the title deed. Under the new rules, the courts will notify the land registry at the same time as the application is sent to the defendant.

In Hungary, the land registries, but mostly the operation and efficiency of the Capital Land Registries, have already distinguished themselves positively compared to other public administrative bodies. After the new regulation comes into effect, procedural difficulties will be a thing of the past, and the land registry will enter the 21st century. However, the current murkiness of the new regulation and the everyday operation of the automated procedure and the detailed rules for the provision of land registry data, may cause uncertainty. We are also curious about the additional rules concerning the training of lawyers and any additional requirements for lawyers.

 

"After the new regulation comes into effect, procedural difficulties will be a thing of the past, and the land registry will enter the 21st century."

 

authors: László Krüpl, Adrián Menczelesz and Viktória Magyar

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László
Krüpl

Attorney at Law

hungary

co-authors