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New Land-related Provisions from 1 January 2023

New Land-related Provisions from 1 January 2023

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On 1 January 2023, a new act on the transfer of agricultural farms entered into force. The management of generational issues and the smoothing of generational change in agriculture is essential for the future of the Hungarian agriculture. In addition, the security of Hungary’s food production could be jeopardised if farm succession is not carried out properly or at all, therefore, the new act aims to help the agricultural sector to renew itself generationally.

The scope of the act covers the transfer of farms of agricultural farmers and self-employed persons engaged in agriculture, forestry and ancillary activities. The act determines the definition of the farm, the farm transferor and the farm receiver. The farm transfer contract is introduced as a new legal instrument and can be concluded under the provisions of 4 types of contracts: sale and purchase contract, contract of gift, maintenance contract or life-annuity contract. The farm transfer contract must be recorded in a public deed or a private deed countersigned by a lawyer, with the statutory content prescribed by the new act. The farm transfer contract must be submitted to the agricultural administration body for approval within 60 days of its conclusion.

From 1 January 2023, certain provisions of the act on the turnover of agricultural and forestry land were also amended. For instance, it is clarified that the land transfer contract must also contain the statutory commitments and declarations relating to the pre-emption right designated by the party acquiring the land. Furthermore, if the land being the subject of the ownership transfer contract is affected by a land use contract in force or not yet in force at the time of the conclusion of the contract, the contract must contain information on the duration of and the consideration for the use of the land. In addition, the fact of the submission of a contract for the transfer of ownership can be recorded automatically based on cooperation between the authorities in case the contract is not refused immediately in the course of the preliminary examination by the authority.

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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