When buying or renting a property, the transfer of possession is one of the most important steps in the process, as it is when the ownership or right of use is transferred. However, many people do not pay enough attention to the details of this step, which can lead to disputes later on. In this article, we have put together a list of things to pay particular attention to when transferring possession of a property to ensure that the transfer is problem-free and legally sound.

What is surrender of possession?

The transfer of possession is the transfer of ownership or use of the property to the buyer or tenant in a legally orderly manner. This can be done in writing or orally, but in all cases it is recommended that it is formalised in a contract. After the transfer of possession, the property is legally in the possession of the new owner or occupier.

What to look out for before transferring the property?

1. Status transfer:
   • Check the condition of the property.
   • Preferably take photographs or video footage of the property in its current state so that you have evidence at the time of handover.
2. Minor errors and omissions:
   • Make a note of any errors or omissions
3. Equipment and accessories:
   • Check that all agreed equipment and accessories are present (e.g. keys, fixtures).
4. Documents and contracts:
   • Make sure you have all the documents you need to take possession of the property (technical specifications, handover report).

The process and documentation of the transfer itself

• Draw up a handover report:
  Record in writing the condition of the property, any defects found and any agreements reached. This will make it easier to settle any disputes later.
• To take photos and videos:
  Any photos or videos of the state of the property can be attached to the handover document.
• Hand over keys:
  Make sure that all the keys you need have been handed over and that the opening of the property goes smoothly.

What should you look out for after the transfer?

• Signature of the handover protocol
• To avoid future disputes, ask for a copy of the minutes
• Check the condition of the property regularly in the future

Summary

During the handover process, it is essential that you go through all the details and put them in writing. This will protect you from any legal problems and ensure that the property has been transferred legally and without any problems.

You can also find such a handover report on our website here: https://www.drokros.com/letoltheto-anyagok/

A company’s registered office is not just an officially registered address in the company register. The registered office is the “official home” of the company, with a number of legal obligations attached to it. One of the most important of these is that the company must keep and make available certain records and documents at its registered office.

📌 Legal background

The obligation to 2006. Act V of 2007 on company registration, court proceedings and winding-up (Ctv.) is determined by.

• Ctv. 7. § (1) states:
  “The company must provide access to the documents required by law at its registered office.”

This means that the authorities, such as the tax authorities (NAV), are entitled to check whether the documents that must be kept are actually available at the head office.

📂 What documents must be kept at the head office?

1. Articles of association, memorandum and articles of association of a company
   – These documents contain the basic rules for the operation of the company.

2. Documents proving registration at the Companies Court
   – The company certificate, registration order and all documents relating to the company register.

3. Licences and operating licences
   – If the business requires a special licence (e.g. catering, construction, pharmaceuticals).

4. Documents related to bookkeeping and accounting
   – According to the Accounting Act (Act C of 2000), this includes general ledgers, accounts, supporting documents.
   – These can be stored electronically, but access must be provided at the head office.

5. Official correspondence, official documents
   – All official documents that concern the company (e.g. NAV notifications, court documents, municipal decisions).

6. Management, decision-making documents
   – Minutes of general meetings, book of decisions, decisions of the executive officer.

⚖️ Why is this important?

• Compliance: during an inspection, if the necessary documents are not available at the head office, the company may be fined.

• Authenticity: documents kept at the head office prove that the company is operating properly.

• In the case of a registered office service: if the company uses a registered office service provider, the service provider must ensure the receipt and safekeeping of the documents – but the responsibility lies with the company management.

📝 Summary

A company’s headquarters must not only have a signboard, but also have access to the most important documents. According to the provisions of § 7 of the Ctv, the authorities can check this, and in case of a deficiency, the company may face a fine or even the risk of being deleted.

👉 Dr. Tamás Ökrös Law Office regularly helps its clients to ensure that their domiciliation, record keeping and legal compliance is as secure as possible.

In previous blogs, we have looked at the building regulations, the Building Code and now we come to the local level.

The role and importance of local building regulations for high-profile condominiums and property developments.

Building codes and local building regulations are key elements of property development and urban planning. It is therefore important for all stakeholders to have a clear understanding of the legal framework that determines the conditions for land use and construction.

The local building code (in short, the LBA) is a legal document drawn up by the municipality of a municipality, which sets out the basic framework for building activity in a given area. It may include green space regulations, building types, zoning classifications and maximum height or design of buildings.

Why is it essential to be familiar with the SBA?

• Legal compliance: a building permit requires that the construction complies with local regulations.
• Internal content and budget: knowledge of the regulations will help you to prepare appropriate plans and budgets.
• Minimising risks: work carried out without a building permit or according to inadequately defined rules can raise questions of legality and ultimately legal consequences.

What steps are needed before construction?

1. Consult the local building regulations: you can consult the local building regulations on the municipality’s website or at the building administration.
2. Property analysis: determine whether the property is suitable for the proposed activity.
3. Obtaining permits: if the construction complies with local rules, you must apply for a building permit from the competent authority.

Summary

Local building regulations are not just a formality, but a basic legal framework to ensure that property development is in line with the development concept of the municipality and is carried out in a way that is compatible with the environment. It is essential for property owners and developers to study local regulations carefully to avoid legal problems and subsequent infringements.

The OTÉK stands for the National Building and Urban Development Requirements. It is a legal and regulatory system that sets out the building, urban development and town planning requirements for the whole country.

As we wrote earlier in our blog on building codes, this is the national regulatory framework, which is translated into local building codes at the municipal level.

In fact, this is a piece of legislation, the interpretation of which is always worth seeking the advice of a real estate lawyer.

The aim of the OTÉK is to regulate architectural and urban development issues in a uniform and consistent way throughout the country.

The main features of the NAP are:

• General framework: it contains the general conditions and principles on the basis of which local regulations (LRA) are developed.
• Urban development guidelines: sets out guidelines for the structural and functional development of settlements.
• Architecture and building regulations: sets out the height, size, layout and general requirements for building types.

Why is the OTÉK important?

The OTÉK is the national legal framework that forms the basis for local planning and building regulations. Local authorities develop local rules in their own HÉSZ (local building regulations) based on the guidelines and provisions of the OTÉK.

Meaning of TEÁOR, occupation codes

The acronym TEÁOR stands for the Standard Industrial Classification of Activities. In practice, it is a uniform classification of economic activities for the collection, analysis and evaluation of statistical data at Community level. TEÁOR is also of major importance at EU level, and in Hungary the Hungarian Central Statistical Office (KSH) is responsible for all activities related to TEÁOR numbers, including the publication, registration or updating of the occupational activity codes.

The HCSO published TEÁOR’03 in preparation for Hungary’s accession to the EU, which was replaced by TEÁOR’08. The differences between the two code systems are explained in a translation table is provided. The TEÁOR codes are in fact the national equivalents of the NACE codes – the latter being the European Union’s own standard introduced in 1970. The most important change to the system was introduced in 2006 by Regulation (EC) No 1893/2006, which is still in force for all Member States from 1 January 2008.

TEÁOR numbers: what legislation applies to them?

The basis for the classification of TEÁOR numbers was previously laid down in Act V of 1973 on Statistics, which has not been in force since 1993. Currently, Act CLV of 2016 on Official Statistics and Government Decree No. 184/2017 (5 July 2017) on its implementation are applicable. However, the relevant provisions of the so-called Companies Act (Act V of 2006 on company registration, court proceedings and winding-up) are of greater relevance in relation to TEÁOR numbers.

• In all cases, the main activity of the company and its additional activities must be recorded in the business register, using the TEÁOR nomenclature.
• When applying for registration, the company must at least indicate its main activity – the company court will notify the National Tax and Customs Office (NAV) of this at the time of registration. Of course, there is no obstacle to indicating other activities at the time of incorporation.
• Changes to both the main activity and the additional activities of the company must be reported to the NAV, but the lawyer must update the articles of association at the next change registration. The organisation notifies the Companies Court electronically, and the Court registers and publishes the changes ex officio.

TEÁOR numbers: how are they built up?

The TEÁOR numbers are all occupational code numbers consisting of one letter and four digits. For the sake of simplicity, let’s take the example of legal activities, which is covered by the TEÁOR code M6910.

• The letter M indicates the sector of the economy, which in this case refers to professional, scientific and technical activities. In total, there are 21 economic activities, which are designated from A to U (education (P), construction (F), hotels and restaurants (I), arts (R), etc.)
• The number 69 refers to the second level, the sector – legal, accounting, tax consultancy. There are 88 sectors, numbered 01 to 99.
• Next is the subsector designation. In our example, this corresponds to legal activities, which is assigned the number 691. The first two numbers refer to the sector, while the third number is to be understood by subsector (there are 272 in total). In other words, this is where legal activities (691) and accounting and tax consultancy activities (692) are separated.
• Finally, we come to the most detailed level of classification of activities, namely the branches. In our case, this will also be legal activities, to which we will assign the activity code 6910 – 0 indicates that there are no further activities. As you can see, not all subsectors are further subdivided to this level, but for example, within business consultancy (702) there is a PR, communication (7021).

Enterprise activities: main and auxiliary activities

Among the activities of the company, a distinction is made between the main activity and complementary activities. The former is defined as the activity that contributes most to the total value added of the firm. It is important to note that a firm can have only one main activity, while any other activity chosen from among the TEÁOR numbers is secondary or ancillary. A firm may already have more than one of the latter – exactly what these are is regulated by the HCSO.

Registration of activities

All companies are required to include and register their main activity at the time of incorporation. This, as well as any modification, requires the assistance of a lawyer, as there is an obligation to register with the Companies Court.

However, you can take up an additional activity at any time later on without incurring any procedural costs – you just need to notify your accountant, who will take care of this with the NAV. There is no legal limit on the number of activities that can be included as a secondary activity, but it is always advisable to choose one that the company actually carries out.

TEÁOR numbers: the invoice

The question often arises as to whether the invoice issued can only include activities that the company has already included. In the past, businesses registered all activities so that they could issue invoices freely – a practice which has made the original purpose of the TEÁOR numbering and coding system much more difficult. This is no longer the case, which means that any company or business can now issue an invoice without restriction for a field of activity that it does not have.

However, it is important to be aware that certain activities may require a licence or specific qualifications. This also means that they cannot be carried out or invoiced without a valid licence. Otherwise, the company could face serious financial and legal consequences.

MANDATORY LEGAL REPRESENTATION IN LITIGATION

The criminal, civil and administrative procedural codes all determine when legal representation is mandatory in a given legal proceeding.

Mandatory legal representation in criminal proceedings

The participation of a lawyer in criminal proceedings is mandatory if.

• the offence is punishable by law with imprisonment of up to five years or more,
• the suspected person or the person reasonably suspected of having committed the offence is under a custodial measure involving personal liberty, is under arrest in other cases, is under compulsory treatment, is serving a prison sentence, is under detention or is in a reformatory,
• the suspected or accused person is deaf, deafblind, blind, speech impaired, otherwise incapable of communicating or severely incapacitated, or, regardless of his or her mental capacity, mentally defective,
• the suspect or the person reasonably suspected of committing the offence does not know Hungarian,
• the accused or the person reasonably suspected of having committed the offence is otherwise unable to defend himself or herself in person,
• the court, prosecutor’s office or investigating authority has appointed a defence counsel on the motion of the accused or of a person reasonably suspected of having committed the offence, or because it considers it necessary for other reasons,
• this Act makes specific provision in this regard.

Mandatory legal representation in civil proceedings

In principle, legal representation is mandatory in litigation, unless otherwise provided by law. Unless otherwise provided by law, legal representation is not mandatory for the opposing party in proceedings within the jurisdiction of the district court, including appeal and review proceedings, or in review proceedings in connection with proceedings within the jurisdiction of the district court.

The district court has jurisdiction in the following cases:

• property lawsuits the value of the subject matter of which does not exceed HUF 30 million or in which the value of the claim based on the property right cannot be determined, except
  • copyright, related rights and industrial property litigation,
  • actions for damages or compensation in respect of the exercise of official authority,
  • public interest litigation,
  • litigation relating to the establishment and legal operation of legal persons,
  • legal proceedings between legal persons and their members or former members, or between members or former members and each other, based on membership,
  • actions concerning the liability of members and representatives of legal persons based on their membership or representation,
  • lawsuits relating to rights deriving from securities,
  • international cargo and international freight forwarding litigation,
• litigation concerning personal status,
• enforcement actions.

This means that legal representation is mandatory in the following cases of civil litigation:

• if the Court of First Instance acts as a court of first instance (but legal representation is not mandatory in labour disputes),
• at second instance, in proceedings before the General Court or the Court of Appeal,
• in appeal or review proceedings before the Curia.

Mandatory legal representation in administrative proceedings

Mandatory legal representation in administrative proceedings

• before the Curia,
• in cases where the Metropolitan Court has exclusive jurisdiction:
  • with the exception of a civil service dispute, a dispute which
    • unless otherwise provided by law, the autonomous regulatory body, the autonomous public administration body and the General Government Office,
    • the railway administration,
    • the aviation authority and
    • the Hungarian National Bank

administrative activities,

• a dispute concerning access to classified information, and
  • disputes relating to the administrative activities of the public body, its organs or officers, disputes between the organs or officers of the public body, and disputes between the public body, its organs or officers and the body exercising control or supervision over the public body.
• in a case concerning an administrative contract.

IN WHAT OTHER CASES IS LEGAL REPRESENTATION MANDATORY?

The rules for concluding a contract are set out in the Civil Code, in the contract law section. Most people don’t realise that even the simplest shopping in a shop is a contract. The seller sells and the buyer buys the goods, and the contract is concluded orally between them. These are what are known as ordinary or everyday transactions. In addition to these, both the Civil Code and other legislation provide for certain types of transactions where legal representation is mandatory.

Prior declaration of rights

For future partial or total restriction of the capacity of an adult to act

• may name one or more persons whom you propose to appoint as guardian;
• may exclude one or more persons from being a trustee; and
• may determine how the guardian should act in certain personal and property matters.

A prior declaration of rights is not a contract, but a unilateral declaration of rights. However, it is special in that if the declarant does not make the declaration before the guardianship authority, it can only be made in a public deed or a private deed countersigned by a lawyer. This means that neither a deed with two witnesses nor a handwritten deed is admissible in this case.

Formation and amendment of companies and cooperatives

This is one of the most typical and widely known cases of when legal representation is mandatory. According to the Civil Code, the articles of association of a company or the statutes of a cooperative must be recorded in a notarial deed or in a private deed countersigned by a lawyer or a legal adviser of one of the founding chambers.

Legal representation is also mandatory before the Court of Registration when companies are incorporated or amended.

Spousal/common-law maintenance or child support with a lump-sum allowance

The spouses/partners or parents may agree in a deed or a private deed countersigned by a lawyer that the spouse/partner or parent who is obliged to pay maintenance will fulfil the maintenance obligation by a one-off payment of an appropriate sum of money or property.

Contracts between spouses

Contracts of sale, exchange, gift or loan concluded between spouses during the common-law partnership and the acknowledgement of debts between spouses are valid if they are recorded in a public deed or a private deed countersigned by a lawyer. This does not apply to a normal gift of movable property if the gift has been transferred.

Division of matrimonial community property

If the spouses divide the community property by contract, the contract is valid if it is recorded in a public deed or a private deed countersigned by a lawyer. This does not apply to the division of movable property forming part of the community property, if the division has been executed.

Marital or civil partnership property contract

A marriage or civil partnership contract is valid if it is recorded in a public deed or a private deed countersigned by a lawyer.

Prior contractual arrangements for the use of the dwelling

Married couples or spouses/partners can arrange the use of the common home in the event of divorce or termination of cohabitation by means of a prior contract. The contract is valid if it is recorded in a public deed or a private deed countersigned by a lawyer.

Parent’s sole right as trustee

Parents exercising joint parental authority may grant each other, either mutually or separately, a power of attorney to manage the child’s property on behalf of one parent. The power of attorney is valid if it is contained in a public instrument or a private instrument countersigned by a lawyer.

Matters concerning the land registry

Apart from business matters, real estate is another area where practically everyone remembers that legal representation is mandatory in real estate contracts. Contracts of sale, gifts, maintenance or usufruct, land, the creation of a condominium – these are the types of real estate matters most frequently encountered in everyday life and known to most people, for which the involvement of a lawyer is essential.

Legal representation must be provided in proceedings brought on request in which the registration of the change of rights is based on a notarial deed or a private document countersigned by a lawyer or a chamber counsel.

Bankruptcy and liquidation proceedings

The head of the debtor business entity may apply to the court for bankruptcy proceedings. The debtor must be legally represented in order to file the application.

In proceedings opened at the request of a debtor, creditor or liquidator in winding-up proceedings, the applicant is required to be represented by a legal representative in relation to the lodging of the application.