On 22 December 2021, the Hungarian parliament published CL Act of 2021, which amends certain agricultural acts and modifies CXXII Act of 2013 on Transactions in Agricultural and Forestry Land (the Land Transfer Act). By changing the approval procedure for the transfer of ownership of agricultural land, this modification to the Land Transfer Act is expected to shorten the time requirement.
Under the new rules, signed sales, purchases and leasehold contracts must be submitted to the agricultural administrative authority (mezőgazdasági igazgatási szerv) for review. Only those contracts that the authority finds appropriate will be published over 60 days to notify pre-emption right holders. This change is expected to result in considerable time savings for contracting parties in cases where the contract suffers from a defect that triggers refusal on formal grounds since under the previous rules, a review by the authority only took place after the 60-day publication period expired.
Now the agricultural administrative authority has 15 days to decide whether the contract is suitable for approval. If the contracts are appropriate, the authority will arrange for publication of the call for pre-emption right holders at the local mayor’s office and at the central website for publishing land transactions.
Importantly, the decision of the agricultural administrative authority at the beginning of the process does not constitute official approval of the contract, but a confirmation only that the form of contract is suitable for approval.
In addition, further restrictions have been introduced for the sale of several land plots in a package (több földnek egybefoglalt vételáron történő eladása). Under the former rules, lands used by the same registered user could be sold in a package irrespective of their location, but the new rules only allow the package sale of lands located in the same or adjacent districts and only if the seller or the buyer was the registered land user for at least three years. Unchanged is the rule that plots adjacent to each other can be sold in packages irrespective of the registered user.
For more information on the new rules in the Land Transfer Act, contact your CMS client partner or local CMS experts:
Article co-authored by Bence Varga.