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Act on the Termination of the Undivided Joint Ownership

Act on the Termination of the Undivided Joint Ownership

Hungary
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At the beginning of July 2020, the act on the termination of the undivided joint ownership on lands and the clarification of the data of the rightholders of properties deemed agricultural land in the land registry was published and will enter into force on 1 January 2021.

The new act ensures the possibility to terminate the undivided joint ownership on the properties considered as agricultural and forestry land. Any of the owners may initiate the termination of the undivided joint ownership. The initiating owner must notify in writing, in a verified way, all other owners having ownership ratio in the land and its registered users. The administrative fee of the proceeding is HUF 15,000. The owners must determine in an agreement the properties to be created in the course of the division and their owners. The decision of the simple majority of the owners calculated on the basis of their ownership ratios is required for the validity of the agreement and its scope will cover all owners. The agreement must be countersigned by an attorney and its inseparable part is a draft map and an area sheet.

The new act also defines the size minimum in respect of the lands in different types of use, and the properties to be created as a result of the termination of the undivided joint ownership may not be smaller than the applicable size minimum.

In case it is not possible to form at least two properties complying with the size minimum from the land, the land may not be divided, but only one owner may acquire the ownership of the whole property by paying an amount equaling to the value of the property part at least, as consideration, to the other owners of the land. Otherwise, in certain conditions, any owner of the property may initiate the expropriation of the property by the Hungarian State.

In addition, by introducing a new proceeding, the act attempts to identify those persons registered as owner in respect of the properties deemed agricultural land whose data are defective in the land registry.

By Lidia Suveges, Attorney at law, KCG Partners Law Firm

Hungary Knowledge Partner

Nagy és Trócsányi was founded in 1991, turned into limited professional partnership (in Hungarian: ügyvédi iroda) in 1992, with the aim of offering sophisticated legal services. The firm continues to seek excellence in a comprehensive and modern practice, which spans international commercial and business law. 

The firm’s lawyers provide clients with advice and representation in an active, thoughtful and ethical manner, with a real understanding of clients‘ business needs and the markets in which they operate.

The firm is one of the largest home-grown independent law firms in Hungary. Currently Nagy és Trócsányi has 26 lawyers out of which there are 8 active partners. All partners are equity partners.

Nagy és Trócsányi is a legal entity and registered with the Budapest Bar Association. All lawyers of the Budapest office are either members of, or registered as clerks with, the Budapest Bar Association. Several of the firm’s lawyers are admitted attorneys or registered as legal consultants in New York.

The firm advises a broad range of clients, including numerous multinational corporations. 

Our activity focuses on the following practice areas: M&A, company law, litigation and dispute resolution, real estate law, banking and finance, project financing, insolvency and restructuring, venture capital investment, taxation, competition, utilities, energy, media and telecommunication.

Nagy és Trócsányi is the exclusive member firm in Hungary for Lex Mundi – the world’s leading network of independent law firms with in-depth experience in 100+countries worldwide.

The firm advises a broad range of clients, including numerous multinational corporations. Among our key clients are: OTP Bank, Sberbank, Erste Bank, Scania, KS ORKA, Mannvit, DAF Trucks, Booking.com, Museum of Fine Arts of Budapest, Hungarian Post Pte Ltd, Hiventures, Strabag, CPI Hungary, Givaudan, Marks & Spencer, CBA.

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