Power of Attorney in Hungary: A Simple Guide for Real Estate Transactions

When and Why You Might Need a Power of Attorney

A power of attorney is often needed when one or more people involved in a Hungarian property transaction can't be present at the same time and place. This is common when someone is living abroad.

Hungarian law allows you to appoint someone to act for you. Anything this representative does is legally binding on you. You give them this power through a power of attorney document. In real estate deals, the buyer or seller grants this power, and the person acting for them becomes their authorized representative.

This representative acts on your behalf during the contract signing and protects your interests.

What Makes a Good Power of Attorney for Real Estate?

A good power of attorney should meet all legal requirements and include any additional details that could be useful.

Here's a breakdown of the essentials I always include in a power of attorney:

• For individuals: Full name, any previous names, birth date and place, mother's maiden name, address, personal identification number, and nationality.
• For companies: Company name, registration number, registered office address, and tax identification number.
• For the representative: Similar identifying information as the person giving the power of attorney.
• For sellers: Precise details of the property being sold, including the town or city, lot number, and the portion of ownership being transferred, as shown on the property title.
• Scope of authority: A clear statement of what the representative is allowed to do (e.g., sell, buy, donate the property, etc.).
• Date and place of signing.

It's also helpful to include the other party's details and the sale price, but this isn't mandatory. If the deal details aren't final, it's good to at least set a price range to avoid problems later. The person giving the power of attorney doesn't need to sign it in person.

What Else Can the Representative Do?

Beyond the crucial step of signing the contract, your authorized representative can take on a variety of tasks to streamline the real estate transaction process. These include:

Signing Additional Legal Documents: In addition to the main contract, numerous other legal documents often require signatures, such as those related to financing, registration, or property inspections. Your representative can handle this, saving you time and effort.

Receiving the Deposit: If a deposit is part of the agreement, your representative can securely receive and manage it on your behalf, ensuring it's handled according to the contract terms.

Managing the Property Handover: The final handover of the property, including the exchange of keys and any necessary inspections, can be seamlessly managed by your representative, ensuring a smooth transition.

Representing You with Authorities and Utilities: Dealing with government authorities or utility companies regarding the property can be time-consuming. Your representative can handle these interactions, ensuring your interests are represented and any necessary paperwork is completed.

Negotiating on Your Behalf: In some cases, it might be beneficial to grant your representative limited authority to negotiate specific aspects of the deal, such as minor repairs or closing dates, within predefined parameters.

Paying Taxes and Fees: Depending on the transaction, your representative might be authorized to pay any necessary taxes or fees associated with the property transfer, simplifying the financial aspects.

While not always necessary, including the authority to cancel the contract can be a valuable safeguard in case unforeseen circumstances arise, giving you the flexibility to terminate the agreement if needed.

Remember, the specific powers granted to your representative should be carefully considered and clearly outlined in the power of attorney document. It's crucial to strike a balance between providing them with sufficient authority to effectively handle the transaction and ensuring adequate safeguards to protect your interests.

Does a Power of Attorney Need to Be Signed in Front of a Lawyer?

Yes, absolutely. In the context of Hungarian real estate transactions, a power of attorney carries significant legal weight. Therefore, it's not enough for it to simply be signed; it must adhere to strict formalities to be considered valid.

One of these crucial requirements is that the power of attorney must be included alongside the other documents you submit for official registration at the Land Registry. Moreover, this power of attorney document itself must be prepared with the same level of legal formality as the documents it's supporting.

In essence, this means that any registration pertaining to property ownership or rights in Hungary needs to be founded on either a notarized deed or a document that has been countersigned by a qualified lawyer. This ensures that the power of attorney, and consequently the actions taken under its authority, are legally sound and enforceable.

What If the Person Giving the Power of Attorney Is Abroad Permanently?

If a client can't travel to Hungary, I often suggest 'remote countersigning.' This makes sure the document is legally valid even if the person never leaves their home!

Alternatively, they can visit their local Hungarian consulate. In that case, they can sign the power of attorney there without needing a Hungarian lawyer.

If the power of attorney is signed abroad, the signature needs to be certified by a Hungarian consular authority or authenticated by them if it was certified by a foreign authority. If there's no Hungarian consulate in the country, it needs to be handled by the consulate of a country representing Hungarian interests.

There's no need for extra certification if the power of attorney is certified with an Apostille under the Apostille Convention.

Summary

The Civil Code has specific rules about powers of attorney, so both lawyers and the land registry mainly want to see that the power of attorney follows the legal rules we've discussed. As a lawyer, I prefer powers of attorney to be as clear as possible. If it's being made without knowing the exact transaction details, I like to at least see the purchase price defined within a certain range. This helps avoid problems down the line.

It is good to know that you also need a power of attorney for delivery if you don't live in Hungary.

If you are interesten in the new Guest Investor Visa, let us know!

Need Help with a Power of Attorney?

Navigating the legal complexities of real estate transactions can be challenging, especially when you're not physically present in Hungary. If you have questions or need assistance with preparing a power of attorney, don't hesitate to contact us!

Remember, a well-drafted power of attorney can save you time, money, and stress. Let us help you get it right.