At the end of March 2020, the Hungarian Government has submitted to the Parliament a bill on the arrangement of the ownership of properties affected by land use right of a producing co-operative (in Hungarian: termelőszövetkezet) and on the amendment of other acts of land-related subject.
On the basis of the bill, the part of a land on which the producing co-operative’s land use right is registered in the land registry, would be transferred in the ownership of the Hungarian State (the National Land Fund) by the operation of law on 1 January 2021. In addition, the agreements on the assignment of land use right concluded by and between the producing co-operative and its successor, will be terminated on 31 December 2022 at latest.
Under the bill, the persons having ownership share (in Hungarian: részaránytulajdon) not yet submitted can claim compensation from the land registry authority registering the ownership share. The authority decides on the applications for compensation and arranges for payment of the amount of the compensation.
By acceptance of the bill, several land-related acts would also be amended e.g. the Forest Act, Land Registry Act, National Land Fund Act, Act on Protection of Land and Land Transactions Act. Thus, the rules of the professional managing and safekeeping of the forest works would be renewed conceptually and the instruments of the forest authorities would also be modernised. Several provisions of the Land Transactions Act would also be amended by the bill, e.g. the definition of the local neighbour would be clarified, and the Act would be completed in a way that the ownership of land could be transferred on title of maintenance and life-annuity only to close relatives, listed churches, municipalities or the state. Furthermore, the bill would exclude the acquisition of the ownership of a land by a fiduciary asset management contract.
By Lidia Suveges, Attorney at law, KCG Partners Law Firm