Main problems of tenants in Hungary

1. Hungarian tenancy law does not secure an undisturbed, long-term tenancy relationship for the tenant. The legislation provides that the landlord may terminate open-ended tenancy contracts any time with a notice until the 15th day of the month, to take effect on the last day of the following month. In addition, landlords usually also provide for the right of ordinary termination in the case of contracts concluded for a determined period.

2. In most cases, Hungarian tenancy law gives priority to the agreement of the parties. Furthermore, even in those cases where the law lays down certain rights and obligations, the legal practice considers that parties are free to deviate from these rules. Therefore, the legislation cannot be expected to address the potential conflict situations and it is crucial to examine the content of the tenancy agreement and make sure that it does not unilaterally favour the landlord.

3. Widespread tax evasion of landlords pushes a large part of the sector into the shadow economy. This leads, on the one hand to part of the tenancy relationships being undocumented, others dissimulated as free use. In these cases, landlords are willing to charge lower prices but the resolution of legal conflicts becomes very difficult. On the other hand, tax evasion also often results in a reluctance of landlords to agree to the tenant’s registration at the local municipality, a declarative act necessary for accessing local services such as nursery schools and schools. Registration is, however, a right of tenants, also possible with a copy of the tenancy contract, without the landlord’s express agreement. 

4. Court procedures take long and their outcome is not entirely predictable in tenancy matters. Therefore, most lawyers are advising their clients to endeavour to reach an amicable solution instead of litigation.

5. Evictions are difficult to obtain and until final court decision, the tenant may claim the protection of its possession against the landlord. In order to avoid the resulting risks, landlords are often requiring the conclusion of a tenancy agreement in front of a notary public, including an undertaking by the tenant to leave the dwelling in the case of termination. As agreements concluded in front of a notary public may be directly executed (i.e. without court decision), tenants need to pay special attention not end up in an unfavourable situation (e.g. not being able to contest unlawful termination before eviction).