Civil Laws at Hungary
Hungary is a civil law jurisdiction, with its legal system rooted in the continental European tradition, heavily influenced by German and Austrian law. The primary source of civil law in Hungary is the Civil Code (Act V of 2013 on the Civil Code), which came into effect on March 15, 2014. This comprehensive code governs the property and personal relations of individuals and legal entities, encompassing various aspects of private law that were previously scattered across different statutes.
Here's a breakdown of key areas of civil law in Hungary:
1. The Hungarian Civil Code (Act V of 2013):
The new Civil Code is a modern, monist code that integrates various areas of civil law, including some commercial and consumer protection rules. It is structured into multiple books:
Book 1: Introductory Provisions: Defines the scope of the Code, interpretation principles, principles of good faith and fair dealing, reasonable conduct, and the prohibition of abuse of rights.
Book 2: The Individual as Subject of Law: Covers natural persons, legal capacity, personality rights, and the protection of personal data.
Book 3: Legal Persons: Addresses the establishment, operation, and termination of legal entities, including companies, associations, and foundations.
Book 4: Family Law: Deals with marriage, divorce, parental responsibility, and other family-related matters. (This book effectively replaced a separate Family Act from 1974).
Book 5: Law of Things (Property Law): Regulates ownership, possession, limited rights in rem (e.g., lien, usufruct, easements), and real estate registration.
Book 6: Law of Obligations: Covers the general rules for obligations arising from contracts, torts (causing damage), unjustified enrichment, and unilateral acts. It also includes specific contract types and rules on liability for damages.
Book 7: Law of Succession (Inheritance Law): Governs inheritance based on testamentary disposition (wills) or by law.
Book 8: Closing Provisions.
2. Family Law:
Now primarily integrated into Book 4 of the Civil Code, Hungarian family law focuses on the protection of marriage and family.
Marriage:
Minimum age for marriage is 18.
Same-sex marriage is not recognized; the Constitution defines marriage as between a man and a woman. However, registered partnerships for same-sex couples exist, providing some similar rights.
The primary matrimonial property regime is community of property, where assets acquired during marriage are generally jointly owned. However, spouses can enter into a marriage contract to define a different property regime (e.g., separate property), which should be recorded in the national register of marriage contracts for validity vis-à-vis third parties.
Divorce: Divorce is generally possible based on the irretrievable breakdown of the marriage. It can be by mutual consent or, if one party is unwilling, by court decision based on sufficient grounds.
Parental Responsibility (Custody):
Unless otherwise agreed or decided by a court, parents generally have joint parental responsibility, which includes caring for the child, selecting their home, managing assets, and legal representation.
Important decisions like name, relocation, citizenship, and schooling generally require joint agreement, even if one parent has sole custody.
Courts decide on sole custody if parents cannot agree, always prioritizing the child's best interests.
Child Support: Parents are obliged to provide maintenance for their children.
Family Policy: The Hungarian government has a strong focus on family policy, offering various tax benefits, housing support (CSOK - Family Housing Benefit), marriage support, and childcare allowances aimed at increasing the birth rate and supporting families.
3. Property Law:
State vs. Private Ownership: Both private and public ownership of property exist.
Real Estate Acquisition by Foreigners:
EU/EEA/Swiss Citizens: Generally, citizens of EU, EEA, and Switzerland can acquire residential and commercial properties in Hungary under the same conditions as Hungarian citizens, without special permits.
Non-EU/EEA Citizens: Acquisition of real property (flats, houses, garages, business premises, etc.) by non-EU/EEA private individuals and legal persons is generally subject to the approval of the competent government agency (the Government Office of the capital city or county where the property is located).
The permit process typically takes around 45 days.
Agricultural and forestry lands are highly restricted and generally only accessible to Hungarian or EU citizens qualifying as farmers.
Hungarian Companies: Companies registered in Hungary can acquire real property irrespective of the nationality of their owners.
Formality: All real estate sale agreements must be in writing and either countersigned by a licensed Hungarian lawyer (with a special qualification registered with the Bar Association) or drawn up as a notarial deed. This is mandatory for legal completion and submission to the Land Registry.
Registration: Ownership title to real property is acquired upon registration in the Land Registry (Ingatlan-nyilvántartás). The land registry procedure has become electronic as of January 16, 2025.
Taxes and Fees:
Property Transfer Tax: Generally 4% of the market value of the real estate (up to HUF 1 billion, and 2% above that, capped at HUF 200M per property).
Legal Fees: Typically 1-1.5% + 27% VAT.
Permit Fee (for non-EU): Around HUF 50,000 (€130-160).
Land Registry Fee: HUF 6,000 (€19.30).
Annual Property Tax: Levied by municipalities based on market value or floor space.
4. Contract Law:
Book 6 of the Civil Code provides the comprehensive framework.
Freedom of Contract: This is a fundamental principle, allowing parties to negotiate and agree on terms as they see fit, provided they do not violate mandatory legal provisions or public policy.
Good Faith and Fair Dealing: Parties are obligated to act honestly and fairly in their dealings.
Offer and Acceptance: A contract is formed by the mutual expression of intent (offer and acceptance).
Consideration: Generally required for a contract to be valid, though exceptions exist.
Form Requirements: While many contracts do not require a specific form, certain types (e.g., real estate contracts) must be in writing or notarized for validity or enforceability.
Performance: Parties are expected to fulfill their contractual obligations.
Breach of Contract: The Civil Code provides remedies for breach, including damages, specific performance, and termination.
Consumer Contracts: Subject to specific consumer protection laws, often influenced by EU directives.
International Contracts: Subject to applicable international conventions and EU regulations, alongside Hungarian domestic law.
5. Tort Law (Liability for Damages):
Book 6, Part IV of the Civil Code deals with liability for damages.
General Principle: Whoever causes damage to another by unlawful conduct is obliged to compensate for it.
Fault-Based Liability: Generally, liability is based on fault (negligence or intent). The burden of proof for fault usually rests with the damaged party, but in certain cases, there's a presumption of fault that the tortfeasor must rebut.
Strict Liability: The law also recognizes strict liability in specific circumstances, such as for damages caused by hazardous operations, dangerous animals, or certain products.
Personality Rights: The Civil Code introduced "tort" (similar to non-material damages/solatium) as a specific subjective sanction for violations of personality rights (e.g., reputation, privacy). It is not always necessary to prove detriment beyond the fact of the offense itself to claim this.
Compensation: Compensation covers both actual damages and lost profits.
6. Inheritance Law:
Book 7 of the Civil Code governs succession.
Sources of Succession: Succession can be based on a testamentary disposition (will) or on law (intestate succession).
Forced Share (Legitime): Hungary has a system of forced heirship. Children (or their descendants) and the surviving spouse are entitled to a mandatory share of the estate. The forced share is one-third (1/3) of what the heir would have received under intestate succession. This limits the testator's freedom to dispose of their entire estate by will.
Order of Intestate Succession: If no will exists, the law establishes a strict hierarchy of heirs (children, spouse, parents, grandparents, etc.).
Inheritance Process:
Succession proceedings are handled by a Notary Public in Hungary, not directly by courts, unless disputes arise.
The notary identifies heirs, inventories assets, and issues a succession decree.
If the deceased was a Hungarian citizen, Hungarian law generally applies to their entire estate.
If the deceased was a foreign citizen and had assets in Hungary, the Hungarian notary public will generally apply the inheritance laws of the deceased's nationality, according to Hungarian private international law rules. However, for real property located in Hungary, Hungarian law may exclusively apply, regardless of the deceased's nationality, under the principle of lex rei sitae (law of the location of the property).
The EU Succession Regulation (No 650/2012) significantly impacts cross-border successions within the EU. It generally stipulates that the law of the deceased's habitual residence at the time of death applies to the entire succession, unless the deceased validly chose the law of their nationality to govern their succession. This regulation helps unify the applicable law for estates with transnational elements within the EU, but its interaction with specific Hungarian property rules (like lex rei sitae for real property) can be complex.
Inheritance Tax: Close relatives (descendants, ancestors, siblings, and the surviving spouse) are generally exempt from inheritance tax in Hungary. For others, a flat rate of 18% applies.
Anyone dealing with civil law matters in Hungary, especially foreigners, should seek professional legal advice from a Hungarian lawyer due to the complexities of the legal system and its interaction with international and EU laws.
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