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Top Court Thwarts Municipal Housing Law Stipulations

MTI-Hungary Today 2021.07.23.

Stipulations in Hungary’s recent municipal housing law facilitating a purchase option to tenants renting their units for a shorter term than 25 years are in contravention with the constitution, the Constitutional Court said in a ruling published on Thursday.

The constitutional review was initiated by President János Áder, who thought that allowing tenants to privatise their municipal units in historical monuments was in conflict with a constitutional stipulation to preserve the national heritage, and such restrictions to the ownership of local governments were not justified.

Parl. Passes Controversial New Housing Law Allowing Council Apartments to Be Sold Underpriced
Parl. Passes Controversial New Housing Law Allowing Council Apartments to Be Sold Underpriced

The new housing law allows tenants to purchase council housing, in some cases for less than a third of the estimated market value.Continue reading

In its justification, the court said that ensuring a purchase option to tenants should be followed by indemnification to the local governments in proportion with the assets they lose in the transaction.

According to the court, the original purpose of the law to provide options to tenants of housing units in historical buildings similar to the privatisation option offered to municipal tenants in the 1990s, would only be met in the case of long-term tenants.

The top court also noted that the state had a constitutional obligation to introduce sufficient guarantees that historical buildings, when privatised, should continue to be managed in line with their historica value.

Featured photo illustration by Zoltán Nagy/MTVA