Buying a New-Build Property in Hungary: Watch Out
Like any transaction, buying real estate in Hungary carries pitfalls. Those pitfalls multiply when you are buying off-plan — a property that exists only on the architect's drawings, with no physical building to inspect, walk around, or assess.
The core risk: the developer's lawyer is not your lawyer
A lawyer will always be involved in a new-build purchase agreement. But that lawyer is typically appointed — and paid — by the developer. It is reasonable to assume the contract will favour the developer's interests. As a layperson you may spot clauses that seem one-sided, but without legal expertise you cannot see what is missing — and what is missing is often more dangerous than what is present.
Our recommendation: have the developer's contract reviewed by an independent lawyer of your own choosing before you sign. An experienced real estate lawyer knows what buyer protections should be written into a new-build agreement: completion guarantees, delay penalties, defect liability periods, bank guarantee or insurance requirements, and step-in rights if the developer becomes insolvent.
The cost of an independent review is modest compared with the purchase price — and far less than the cost of discovering a problem after you have signed.
Due diligence on the developer
Before signing any new-build agreement, carry out thorough checks on the developer:
- Company registry (cégnyilvántartás): verify the company is solvent and in good standing. Look for any pending insolvency or enforcement proceedings.
- Online searches and forums: search the developer's name across Hungarian real estate forums and news sources. Buyer complaints about late delivery or construction defects are often documented online.
- References: ask for completed projects and speak directly to previous buyers if possible. A reputable developer will have no objection.
Key protections to negotiate
A well-drafted new-build agreement should include at minimum:
- A fixed completion date with a delay penalty payable by the developer for each day of late delivery.
- A clear defect liability period (Hungarian law provides a minimum, but a longer period can be negotiated).
- Provisions specifying what happens if the developer's financing falls through or the project is abandoned.
- Defined standards for the handover inspection and a punch-list process for defects found at delivery.
Buying a new-build property in Hungary is an exciting but legally complex transaction. Contact our firm before you sign — we will review the developer's contract, identify the risks, and negotiate the strongest possible protections on your behalf.
