Szerző: Ügyvédi Iroda
Real estate purchase is one of the biggest financial decisions of our lives, with the purchase agreement being its central document. Its proper preparation and professional drafting is crucial for both parties, as a poorly worded contract can have serious financial and legal consequences. This guide helps navigate the world of purchase agreements, presenting the most important facts and common pitfalls.
Why is Proper Preparation of the Purchase Agreement Crucial?
Proper preparation of the real estate purchase agreement is one of the most critical moments in real estate purchasing. An insufficiently considered or incompletely prepared contract can have severe financial and legal consequences for both parties. During an average real estate transaction, buyers often make the biggest financial decision of their lives and invest their entire family savings, while the seller sells their most valuable asset, which is why ensuring adequate legal protection for both parties is essential.
The Biggest Financial and Legal Risks of Real Estate Purchase
During real estate transactions, numerous risks must be faced. One of the most significant dangers is rights or claims not appearing on the title deed but existing in relation to the property, particularly third parties’ right of first refusal. An equally serious risk is improperly recorded payment scheduling, or in case of bank financing, the omission of mandatory content and formal requirements prescribed by the selected bank, which can prevent loan disbursement.
What Can You Lose with a Poorly Prepared Contract?
In case of an unprofessionally assembled purchase agreement, the buyer may lose the earnest money, or even the entire purchase price may be at risk. From the seller’s perspective, there is a risk of transferring the property ownership without receiving the full purchase price. Moreover, incorrectly formulated contractual conditions can later lead to legal disputes, resulting in costly and lengthy litigation.
How Does a Professional Contract Protect Your Interests?
A properly prepared purchase agreement regulates the parties’ rights and obligations in detail, clearly establishes payment, possession transfer, and other conditions considered essential by the parties. It ensures secure payment of the purchase price and guarantees undisturbed transfer of ownership. A professional contract also addresses details such as the process of utility transfers or the enforceability of warranty claims regarding possible hidden defects. Beyond the carefully prepared contract, our Firm provides appropriate professional support throughout the entire process, answering arising questions and handling any unexpected problems that may occur.
Mandatory Content Elements of the Purchase Agreement
Data of Contracting Parties and Their Identification
The contract must precisely state the natural identification data of both parties, including birth name, place and time of birth, mother’s name, personal identification number, tax identification number, and address. For companies, the company name, registered office, company registration number, tax number, and data of the person authorized to represent must be provided. Stating citizenship is also a mandatory element, as foreign citizens may require additional permits.
Precise Determination and Parameters of the Property
For property identification, the name of the settlement and the lot number, as well as the natural address, are minimally required. The property’s nature, floor area, and main parameters should also be recorded. In case of condominium apartments, the proportion of participation in common property and any separately owned elements (e.g., storage, garage) must also be determined.
Recording Purchase Price and Payment Conditions
The exact amount of the purchase price must be written out in both numbers and words. Payment scheduling must be determined in detail, recording the earnest money, any advance payments, and the payment deadline for remaining purchase price installments. The payment method (cash or transfer) and any installment payment conditions must also be regulated. In case of bank loan utilization, special provisions must be built into the contract.
Conditions and Timing of Possession Transfer
The timing and conditions of possession transfer must be clearly determined. Considering the instant transfer system, it is advisable today to record that possession transfer occurs simultaneously with payment of the full purchase price. The requirement for preparing a possession transfer protocol should also be prescribed. The contract must address the reading of utility meters and bearing the related costs.
Critical Points in the Purchase Agreement
Title Deed Verification and Interpretation
The title deed is the publicly authenticated document of the real estate registry, consisting of three parts. The first part contains the property’s basic data, the second part contains entries regarding ownership and other rights, while the third part records encumbrances. Before apartment purchase, thorough review of the title deed is essential, particularly checking the ownership circle and registered encumbrances. During real estate sales of condominium apartments, beyond checking the property’s title deed, checking the condominium’s master sheet is also essential, which may record co-owners’ right of first refusal or encumbrances affecting the condominium as a whole.
Clarification of Encumbrances and Rights
Encumbrances existing on the property (such as mortgage rights, execution rights) and other rights (usufruct, right of first refusal) can significantly influence the sale. The process and conditions of encumbrance removal must be regulated in detail in the contract, especially when the transaction is realized with bank financing. In case of right of first refusal, rules regarding notification of entitled parties must be observed, which differ depending on whether the subject of sale is an apartment or an indoor garage.
Purchase Price and Payment Structures
Rules Regarding Earnest Money
Earnest money serves as security for the purchase agreement, the amount of which is generally 10% of the purchase price. Earnest money has special legal nature: if the contract fails due to the fault of the giving party, they lose the amount, but if due to the fault of the receiving party, they are obligated to return it double. An important difference compared to advance payment is that advance payment is always returned in case of contract failure.
Special Conditions Applicable in Case of Bank Loan
In case of bank financing, the contract must contain special provisions prescribed by the given bank. The amount of housing loan characteristically cannot exceed 75-80 percent of the market value of the collateral property. The contract must record the conditions of loan disbursement and the rules for issuing ownership registration permits. The time requirement of bank administration must be considered when determining payment deadlines, and preliminary administration must be started before making a purchase offer for the property to be acquired.
Possession Transfer and Handover-Takeover
Content of Possession Transfer Protocol
Completing and signing the possession transfer protocol is the last step of the real estate sale process, regarding which our Firm also provides assistance to the parties. The protocol records in detail the property’s condition at the time of transfer, including any defects or deficiencies, all utility meter readings must be stated, the exact time of possession transfer and the list of handed over keys and documents. During apartment purchase, this document can later serve as evidence in case of possible legal disputes, therefore it must be prepared with special care.
Transfer of Utility Meters
Transfer of utility services often causes misunderstandings during sales, which according to legal regulations is a joint obligation of both seller and buyer within 15 days after possession transfer. In practice, it is advisable to precisely determine in the contract which party is responsible for initiating transfers and with what deadline, which for practical reasons is usually the buyer. During utility meter transfers, the meter readings recorded in the protocol will also be decisive, which can be handled simply, on one interface, online.
Detailed documentation of any defects and deficiencies of the property is critically important to avoid later disputes. In the possession transfer protocol, all detected defects, damages, or malfunctions must be listed, preferably supplemented with photographic documentation. The parties may agree on the deadline and method of defect correction, which must also be recorded in the protocol.
Handling Special Situations
Disregarding Right of First Refusal
Neglecting the right of first refusal is one of the most common errors in real estate purchase agreements. In case of condominium apartments, based on the founding document, while in case of undivided common property, based on the provisions of the Civil Code (Civil Code 5:81), a right of first refusal may exist. The seller is obligated to communicate the accepted purchase offer to those entitled to first refusal and provide them with adequate time for declaration.
Marital Community Property Issues
The rules of marital community property can significantly influence the apartment purchase process. In case of marital community property, the spouse also acquires ownership even if they do not appear as a buyer in the purchase agreement. For selling property belonging to marital community property, the consent of both parties is required, regardless of who appears as owner on the title deed. The content of marital property agreements must also be considered during the sale.
Procedure to Follow in Case of Minor Owner
In case of a minor owner, guardianship authority approval is required for real estate sale. Legal representatives must prove that the sale serves the minor’s interest. Guardianship authority regulations must also be observed regarding the use of the purchase price. The time requirement of the guardianship authority procedure must be calculated into the scheduling of the sale process. The buyer must pay increased attention to ensure all necessary permits are available.
Existence of Usufruct Rights
Usufruct rights significantly influence the property’s marketability and value. Without the usufructuary’s consent, transfer of the property’s ownership does not affect the usufruct right, which thus continues to exist. The buyer must be aware that when purchasing property encumbered with usufruct rights, acquiring ownership does not automatically mean the right of use. The conditions for terminating or redeeming usufruct rights must be regulated in detail in the purchase agreement.
The attorney is not simply the drafter of the purchase agreement, but the professional supervisor of the entire process. They are responsible for the contract’s legality, identification of parties, and verification of real estate registry data. The attorney is obligated to draw the parties’ attention to risks and ensure safe completion of the legal transaction. Their professional liability insurance guarantees that any damages resulting from professional errors will be compensated.