The amendment of the 179/2023 (V. 15.) Government Decree (Inyvhr.) which came into force on 14 March 2025 introduces significant improvements to the land registry procedure. The amendment partly simplifies the sale and purchase of encumbered properties, as well as clarifies that the registration of a buyer’s right on a specific ownership share does not suspend applications of other ownership shares. Additionally, it includes an important amendment regarding corporate law changes related to real estate.
Simplification of real estate transactions involving encumbered properties
The new regulations on the land registry procedure enable the registration of the buyer’s right related to the retention of title as well as the buyer’s right related to future buildings. The registration of a buyer’s right related to the retention of title combines the advantages of previous sale and purchase with retention of title and the suspension of applications, as applications related to the relevant property are suspended for six months from the start of the registration’s effect. After this period, its effect aligns with a prohibition on alienation and encumbrance.
According to the amended regulations, the deletion of mortgages (independent liens) the deletion of related prohibition on alienation and encumbrance, as well as the deletion enforcement rights, are exempted from suspension. Such applications will be processed by the Land Registry regardless of the ranking of submitted applications. This will allows the deletion of such encumbrances even in the case of a buyer’s right related to the retention of title or a buyer’s right related to a future building is registered.
Under the current (from 15 of January 2025 to 14 of March 2025) provisions, the registration of a buyer’s right related to the retention of title requires the consent of the holder of the prohibition on alienation and encumbrance. In the case of a sale and purchase of an encumbered property, the aforementioned rule results in that the registration of the buyer’s right depends on the approval of the lender bank of the seller. This could create unnecessary obstacles and, in cases of delays or refusals, may even result in the transaction’s failure. (In the previous land registry procedure, this issue did not arise for applications submitted with a request for suspension, as such applications were not evaluated until the registration authorisation was submitted, allowing time for the property to be cleared of encumbrances.)
With the amendment, the consent of the holder of the prohibition on alienation and encumbrance are no longer required for the registration of a buyer’s right related to the retention of ownership. This significantly reduces administrative burdens for sellers and mitigates the risks associated with real estate transactions.
Effect of the suspension on ownership shares and incorporeal interest
Another key change, primarily linked to the buyer’s right related to the retention of title (but applicable to all cases of suspension of procedure), is that the new regulation explicitly states that a suspension affecting a specific ownership share (even based on a buyer’s right) only suspends applications concerning that particular share. Therefore, the registration of the buyer’s right will not impact applications related to other ownership shares nor their registration in the land registry.
The amendment clarifies that a land registry suspension may apply to an entire property, an entire ownership share, or an incorporeal interest thereof. It explicitly states that when a suspension is based on an ownership share, applications concerning another ownership share or a different incorporeal interest may still be processed. This change eliminates previous uncertainties and makes the regulation more transparent.
Registration of Rights Concerning Real Estate in Corporate Law Transactions
From 15 January 2025, the Land Registry Office registers changes related to real estate rights and facts (including their creation, modification, or termination) based on an order issued by the company court. If a final decision or a registration (or modification registration) order issued by the company court requires a land registry entry, the land registry office will process it accordingly.
According to the amendment, in a land registry procedure initiated based on a company court decision delivered before the aforementioned date, the company court’s decision may serve as the basis for registration along with other documents substantiating the change, even if it does not contain a specific provision for land registry registration, and the application is submitted by the person affected by the decision.
Author: Levente Kálmán (Partner at Szabó Kelemen & Partners Andersen Attorneys)