Dr. Olga Latkóczy, Head of Division for Land Registration
Dept. of Land Administration and Geoinformation, Ministry of Agriculture and Rural Development

New rules of law on land registration

During the past decade, the number of the cases significantly increased because of the extended real estate market transactions. This situation affected Budapest most heavily, where a critical amount of backlog was accumulated.

At the end 1998, there were altogether 185 000 outstanding cases in all rural land offices, while 670 000 in Budapest.
The increasing of the backlog to such an extent threatened the security of title, so at the beginning of 1999, the accelerated processing of backlog started involving the staff of the rural land offices too.

Instructions of ministerial and departmental level were issued on the cooperation of the participating organizations. The rural land offices performed this task completely as overwork and contracted retired employees too, because the basic expectation was that the processing of backlog could not hold up their own official work. The overwork expenses were financed by the Ministry.

By the end of 2000, the backlog in Budapest decreased to 110 000 so that the backlog in the majority of the counties did not increase at the same time. This campaign was successful; the number of former backlog and the newly submitted applications altogether reached 327 000, and out of this, only 117 000 unsettled cases remained in Budapest. 

These outstanding properties created problems first of all in the Budapest District Land Office, representing a significant proportion of the accumulated backlog.

 The professionals know well, which reasons led to this situation; one of them was that there was no way to settle the cases in line with the Act No. 31 of 1972 on land registration procedures. Because of lack of time, there was no opportunity to complete the documentation the land offices asked for, so these applications had to be rejected in many cases. Although the clients appealed the decisions, but the second instance land office had to reject them as well, according to the valid general rules of land registration. Unfortunately, there was no way to issue positive decisions in these cases.

But the new rules of law on land registration that stepped into force on 1st January 2000 gave way to settle the status of ownership rights of disputed properties. Namely, by request, a special procedure provided in the new rule is applicable in the case of disputed properties. The registration of the ownership rights can be performed along „simplified rules”, enabling the case managers to solve the problems concerning unsettled ownership relations. The management of the Ministry also keeps an eye on the closing down of the procedure concerning disputed properties; therefore they are controlling the progress of the work. To help it, a methodology was elaborated for the land offices. The citizens can find the advertisements about this new opportunity in the land offices.

The mortgage right based on real estates has been well known in the crediting practice of banks; in fact it is especially true to almost all credit institutions dealing with housing credits, who consider the mortgage right based on real estate and its registration to be convenient collateral.

The governmental decree 1041/2000 (V. 31.) on the further steps needed to the realization of the housing concept declares the  crediting based on mortgage to be especially important in the case of supporting the home-building too.
The authenticity of the land registration, the quickness or slowness of updating with the changes, and also the level of land office data servicing: all these directly affect the activity of the crediting institutions in this respect.

Considering the importance of realizing the concept, the Minister sent a report to the Government about the situation of the processing of applications aiming at registering the mortgages and the result of the necessary extraordinary measures. Of course, the land offices continuously dedicate special attention to these cases, and judge them out of turn.

The onsite pegging out and putting into possession of the properties sold by compensation auction and the registration of the new owners have mostly been performed (716 000 items). The rest remained still unsettled because in some cases the juridical procedures concerning the separation of the Land Fund had not been finished, or was finished only recently.

In the first half of the past year (2000), the State Audit Office (ÁSZ) has examined the registration and legal status of the land and other real estates owned by the Hungarian State.

It turned out in several cases that there were no trustees registered for the management of certain properties, or already non-existing organisations were registered as trustees. All these confusions can lead to significant loss of State-owned assets through positive prescription. Another problem arises with the fact that many real estates are registered as properties owned by the State, while those went over into the ownership of local governments in line with section (2) para. 107 of the Act LXV (Ötv.) of 1990. But failing to apply for registration, the registration has not been updated with this change in ownership rights. Considering the statements made by ÁSZ, a complete new examination of State-owned properties took place at the land offices.

Although it is true that the authentic registration of ownership rights is the one maintained by the land offices, but exclusively the organizations exercising the ownership rights (KVI, ÁPV Rt.) are authorized to take the measures needed to settle the status of State-owned real estates. Therefore, the agreements and the registration of KVI as trustee are speeded up.

Administration service fees of the land registration data and the online data servicing

The planned ministerial decree on regulation refers – among others – to the servicing of certain land registration data queried from the computerised database, the administration service fee and its management, the online access to the land registration database and the data servicing through data transmission line, its fee and the management of fees.

The establishment of the computerised databases of the land offices allowed the building up of the countrywide computerised network of land offices (TAKARNET) and the online servicing of land registration data.

The data of any land or other property in any part of the country are available through TAKARNET for land offices, but also for other registered users (e. g. local governments, lawyers, public notaries, banks etc.).

The network is now complete, but it is not operable for external users yet, being in testing period all over the country, and the decree regulating the use of the network and the service fees has not come out either. According to plans, the access to network can be expected in the first half of this year (2001), after closing down the test and when the mentioned regulation steps into force.