4.1 Formal requirements The most important formal requirements for the transfer documentation of any real estate are the followings: (a) the agreement must be concluded in writing; (b) it must be prepared and countersigned by a Hungarian attorney - at - law or public notary; (c) in case of a multiple - page document, all pages must be signed by the contracting parties and the countersigner. 4.2 Compulsory elements The Hungarian law prescribes several elements that must be included in the property sale and purchase agreement. Some notable elements are: (a) detailed definition of the property; (b) certain scope of data of the contracting parties (among others, birth name, place and date of birth, address, mother’s maiden name, tax identification number, or registered seat, registration number, statistical number, tax identification number in case of legal persons); (c) the exact legal title of the transfer (e.g., sale and purchase); (d) unconditional and irrevocable statement of the registered owner on consenting to the transfer of the title (“ registration consent ”) (which statement may also be made later on separately, especially if the payment of the purchase price is made in instalments); (e) regulations on the handing over of an energetic certificate (energy

certificate is a document made by an authorized expert that gives

information about the energy features of the property, generally the seller is obliged to prepare such energy certificate and to hand it over to the buyer at contract signing). 4.3 Typical further elements of an agreement Although the inclusion of the below elements is not legally required, according to market practice the parties apply them frequently. (f) Payment of the purchase price in more instalments In case the purchase price is paid in more instalments, there are two typical scenarios regarding the transfer of title.

The first option is when the parties submit the request to registration, but with a request for suspension, meaning that the Land Registry will not deal with the request until the seller issues the registration consent after the payment of the full purchase price. This method ensures that, due to the ranking principle, the buyer’s request cannot be preceded with any other request, so the legal status of the property existing as at contract signing is secured. Typically, the registration consent is put into lawyer’s escrow by the seller at contract signing and is released by the escrow agent upon the payment of the full price. It should be noted that such suspension procedure can only

ILN Real Estate Group – Buying and Selling Real Estate Series

Made with FlippingBook Online newsletter