Buying property in Hungary can hide many pitfalls which may turn the purchase into a nightmare, find help and how-to's in our legal guide!
I would like to share with you some brief tips and advice in case you plan to buy a property in Hungary.
There are some legal and non-legal risks as well, which can of course be mitigated by an expert on the spot – assuming you don’t want to leave such an important investment to luck.
Your chosen property might be a house or an apartment; it’s location might be in a small town, or in the capital. In any case, before making a commitment, a preliminary legal SWOT analysis is highly recommended. This is a technique which I often use – not only for property conveyances.
SWOT is a strategic planning technique and stands for Strengths, Weaknesses, Opportunities, and Threats.
Strengths and weaknesses are relatively easy to speak about and assess, as they are existing facts, like location, the state and technical condition of the property etc. Strengths and weaknesses affect the opportunities, which you consider when you set up your goals. However, it can be dangerous if you don’t know all the important legal circumstances.
The actual state and local legal environment such as restrictions on usage of the property are also an existing fact, for example:
- Is it permitted to rent your store in the city center to a bakery, or your apartment to a dentist as a surgery, or to tourists for short term lets,
- Is it allowed to modernise your house, or is it under national- or local monument protection,
- Does the property comply with the existing construction standards and regulations – or not – as is quite often the case.
Overestimating or underestimating of any circumstance may lead to wrong decisions, therefore you may miss out on an opportunity or lose the time and money invested, so we’ve arrived at the threats.
Potential Problems buying a Property in Hungary
Did you know, that a property in Hungary, subject to urban planning restrictions, won’t be demolished in all cases? It may be sold, everything looks fine, but it can be never reconstructed legally? Did you know, that if such property is damaged or perishes no matter for what reason, it can’t be rebuilt again?
After exploring all the legal threats, we have to explore the technical threats. The lack of technical knowledge can cause issues on a wide range from small warranty disputes to huge refurbishing costs, or even worse, to an unusable property.
Buying a Property in Hungary can be absolutely tricky: Did you know that in the big cities of Hungary some properties are more than 100 years old, and some of them suffered bombings during the world war? Some of them still have their 100 years old articles of associations containing pre-emption rights or other codes of conduct! Were you aware that some concrete blocks of flats are constructed by the so called IMS technology, which has to be hardened after 30-40 years, and if not, won’t be fit for habitation?
If you are aware of all the legal an technical circumstances, you can make an appropriate decision, mitigate the technical and legal threats, and your property will be a useful and profitable investment, or your tranquil and peaceful home!