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New Rules in the Land Registry Act in Hungary

New Rules in the Land Registry Act in Hungary

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In principle, in the course of the land registry procedure, the position of an entry of record in the land registry, and the order of such records is determined by the filing date of the applications or requests. Under the Hungarian Land Registry Act, the order of the entries may be modified on the basis of an authentic instrument signed by all parties, a private document countersigned by an attorney or bar association legal counsel, or on the basis of a private document where the signatures of the parties are attested by a notary public.

On several occasions, the application for the cancellation of a mortgage registered on a property is filed following the submission of the application for the registration of a right on the real estate affected. However, the interest of the clients is that the mortgage and other encumbrances are cancelled from the land registry extract as soon as possible. According to the new rule of the Land Registry Act entered into force at the end of 2018, the resolution on the deregistration of the mortgage, the related restraint on alienation and encumbrance or restraint on alienation and the execution right must be completed in the land registry regardless of the ranking of the indexed applications. 

The recent amendment of the Land Registry Act terminated also a legal gap. Previously the Land Registry Act did not rule whether the land registry authority should examine the further entries based on the right cancelled. The new provision of the Land Registry Act provides for that in case an entry is cancelled for certain reasons at a later stage by the land registry office, the resolution on the cancellation must also apply to the subsequent records that had been based on the entry cancelled.

By Gabriella Galik, Partner, KCG Partners Law Firm

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