Hungary Rental Laws: Pro-landlord, Neutral or Pro-tenant?

Hungarian landlord and tenant laws are judged by the Global Property Guide to be Pro-Tenant between landlord and tenant. Residential leases in Hungary are highly regulated, with legislation generally favoring tenants. While rent fees are not capped and there are no regulations limiting rent increases, the termination of leases and eviction of tenants can be challenging under current laws.

Rents: Can landlord and tenant freely agree rents in Hungary?

The tenant and landlord are free to agree on rent in Hungary. The first and most crucial requirement is a written rental agreement, signed by both parties. While it may be tempting to settle the terms via email, it's important to note that such an agreement is not legally valid. To avoid any future disputes over the terms and key provisions of the lease, we recommend formalizing the contract in a private document with full legal force, either signed by two witnesses or countersigned by a lawyer.

In Hungary, the lease term for rental properties can vary, but the most common duration for residential leases is 12 months. This one-year term is typical for both furnished and unfurnished properties. While shorter leases (e.g., 6 months) are available, they are less common, and longer lease terms can also be negotiated.

Rent is typically adjusted annually, either based on the Monetary Union Index of Consumer Prices (MUICP) published by the European Central Bank for rents paid in euros, or on the International Comparison Program (ICP) published by the Hungarian Statistical Office for rents paid in Hungarian forints.

Deposits

The deposit, its rate and other conditions can be freely agreed by the contracting parties. The usual amount of deposit is around 1-3 months' rent. The landlord has the right to request a deposit of up to three months' rent to ensure the tenant meets their obligations under the rental agreement.

What rights do landlords and tenants have in Hungary, especially as to duration of contract, and eviction?

The tenancy agreement may be concluded for a definite term, or an indefinite term, or until the occurrence of a certain condition defined in the agreement.

In case of a definite term, the contracting parties must designate a termination date.

Definite term agreements

Rental agreements concluded for a definite term, or until a certain condition has occured, terminate at the termination date agreed, or when the agreed condition is fulfilled. They cannot be terminated by either of the parties, except for breach of contract.

Reasons for termination by the Landlord for breach of contract are defined by the Lease Act as follows:

• the Tenant fails to pay the rent by the agreed date;
• the Tenant fails to perform his essential contractual or legal commitments;
• the Tenant has a depraved, antisocial lifestyle which conflicts the requirements of cohabitation;
• the Tenant damages the property or the common premises, or uses them for an unintended purpose;
• the Landlord is able to offer a vacant property adequate for the Tenant.

Termination must be in writing, and verbal termination is invalid.

Indefinite term agreements

The contracting parties may terminate an indefinite term contract in writing at any time, according to the terms of the rental agreement.

If there are no provisions for termination in the tenancy agreement, then the Lease Act will prevail. In most cases the minimum termination period is 15 days.

The rental relationship expires in any case if

1. The tenancy agreement is terminated by mutual consent of the contracting parties;
2. The property ceases to exist;
3. The entitled contracting party terminates the agreement (i.e. termination);
4. The Tenant dies and there is no one entitled to continue the rent;
5. The Tenant changes the rental right of the property (with the consent of the Landlord, with very limited conditions);
6. The Tenant is expelled from the territory of Hungary;
7. the court terminates Tenant's rental right;
8. The Tenant's rental right is terminated by other official decision.

Legislation

Civil Code (Act V of 2013): This is the primary legal framework that governs rental agreements, rights, and obligations of both tenants and landlords. It covers various aspects such as lease contracts, rent, termination of leases, and the eviction process.

Relevant legislation are as follows:

• Act IV of 1959 of the Civil Code;
• Act LXXVIII of 1993 on Residential and Commercial Leases;
• Various municipal regulations adopted by authorization of an act.

These laws together ensure that both parties’ rights and duties are protected, although the regulations tend to favor tenants in certain circumstances, such as lease termination and eviction procedures.

History: Recent changes in Hungarian landlord and tenant law

Most of the legal provisions were enacted prior to the change of system in 1989. Due to these rapid political and economic changes, the adoption of a unified, up-to-date regulation became necessary. While previous acts did contain elements suitable for free market conditions, the sphere of these elements was substantially expanded by the Lease Act of 1993, which ensures a wide range of contractual freedoms.