Changes to lien regulation in Hungary
By Dr. Attila Kovács, Kovács Réti Szegheõ Attorneys at Law
The new Civil Code has brought fundamental changes to the regulation of lien. The establishment of lien has been simplified, the rights of the lienor concerning the enforcement of the pledge have been broadened and new legal institutions have been introduced.
Establishment of a lien
The establishment of lien takes place in two steps: a pledge agreement and the registration of the lien in the relevant register.
Any asset of value (movable or real estate property, right or receivable) can be pledged as security.
As exemption from the collateral character of the lien, the new Civil Code allows the lienor to transfer the lien without having to transfer the secured claim to the holder of their debt.
The seceded lien serves as the security of the claim, by providing satisfaction for the claim of the person who acquires the lien by transfer. The rights stemming from the lien shall be exercised without jeopardising the recovery of the original secured claim.
The electronic collateral register provides fast, simple and transparent administration to enhance the security of transactions.
Making entries into the collateral register, as well as their deletion, shall be immediate and automatic.
New ways of lien enforcement
The right to satisfaction shall be exercised either by way of judicial enforcement or by means other than judicial enforcement established by the act, such as the sale of the pledged property, the acceptance of the ownership of the pledged property or the enforcement of the right or claim instead of the original mortgagee.
Dr. Attila Kovács, Managing Partner
Kovács Réti Szegheõ Attorneys at Law
Tl: +361 275 27 85
Dr. Attila Kovács graduated from the Faculty of Law at Eötvös Loránd University in 1996. After gaining professional experience in Hungarian and German law offices, he is a member of Kovács Réti Szegheő Attorneys at Law, and has been Managing Partners since 2004. He is an arbitrator at the Arbitration Court that is attached to Hungarian Chamber of Agriculture, he is Chairman of the Geneva Group International's Insolvency Practice Group, and Chairman of the Zugliget Voluntary Pension Fund's Supervisory Board. Attila speaks Hungarian, English and German and his primary areas of practice are bankruptcy law, real estate law and corporate law.
Kovács Réti Szegheő Attorneys at Law was established in 1992 and is one of the oldest independent Hungarian law firms. It is active in Hungarian, English, German and Italian and operates over a wide spectrum within the fields of civil and business law, for both domestic and international clients. Kovács Réti Szegheő Attorneys at Law has gained immersive experience in the fields of corporate law, mergers and acquisitions, construction law, real estate law, securities law, bankruptcy law, labour and employment (also including health & safety), competition law and intellectual property law. It also advises clients in matters related to the internet such as e-business and data protection, as well as advising on environmental protection, public procurement law and energy law.
published: March 2014