Rental contracts

What to consider before signing a contract

So you have found your dream apartment and are just about to sign the contract? Make sure you know and understand the details before you sign your name.

Hungarian law differentiates between two types of rental agreements – free and controlled (obligatory rent):

• Free rental market - In the free rental sector, you can freely agree the rent with your landlord, and the court has no power to intervene.
• Controlled sector - Residences owned by the municipality or the state fall in the “obligatory rent” sector, where the rent is stipulated by law. The tenancy contract may be signed without even mentioning the rent. In this case the landlord (i.e. the municipality or state) has to notify the rent to the tenant within 8 days of moving in. If the tenant does not object to the notified rent in writing within 8 days of delivery, the notified rent will become the actual rent.

Legislation

If you want to have everything under control, we advise you to check out the following legislation that specifies the rights and obligations of the tenant and the landlord regarding the rent during the rental period:

• 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.

As you will soon find out, a rental agreement does not have to be drafted in any special form and many landlords even prefer verbal rental agreements. As good as it may sound, there is also a dark side. The landlord can decide to terminate the contract and leave you in the street without the possibility of appeal since verbal termination is invalid.

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.

When you move into your new room or apartment, we recommend you take photos to document the state of the property. This may help you get back your deposit afterwards, if the landlord claims money for renovation or repairs. On the other hand, you may also be lucky enough to find a landlord who won’t ask you for the deposit.