Introduction: handing over the keys also changes the legal position
By handing over the keys, the landlord does more than merely enable the tenant to move into the apartment: possession of the apartment is also transferred to the tenant, creating a legal situation that cannot later be disregarded simply by relying on the landlord's ownership. The framework for this is determined above all by the lease agreement. A residential lease agreement is valid only if made in writing, but written form alone does not provide adequate legal certainty. What is needed is an agreement that accurately reflects the parties' mutual and concordant intention and that regulates in advance, clearly and in sufficient detail, situations in which their interests may later cease to coincide.
Naturally, a landlord does not lose ownership merely by letting the apartment; however, for the duration of the lease, the landlord transfers direct possession and use of the apartment to the tenant. From that point onward, the tenant's legal position cannot be reduced to that of 'someone living in the owner's apartment': the tenant has an independent position as possessor and contracting party, with his or her own rights, obligations and legal protection. Conversely, the landlord is not merely entitled to receive rent: the landlord also has obligations concerning the proper condition of the apartment, the allocation of costs, termination of the legal relationship, recovery of the apartment and settlement of the security deposit.
For this reason, it is misleading to regard a residential lease agreement as nothing more than a document recording the rent, the security deposit and the notice period. In judicial practice, serious disputes repeatedly arise precisely from details that the parties regarded as incidental or self-evident when concluding the agreement.
1. Allocation of costs: 'the tenant pays the utilities' is not always enough
In the case of utility charges, it is usually relatively straightforward to determine what consumption gives rise to a payment obligation and in what amount. Disputes are more likely to begin with expenses where it is first necessary to determine whether the work in question constitutes maintenance, refurbishment, replacement or renewal, and whether the landlord or the tenant must ultimately bear the cost.
Under the general rules on leases in the Civil Code (Act V of 2013 on the Civil Code; the 'Civil Code'), as a rule the tenant bears minor expenses associated with maintaining the property, while other costs and charges relating to the property are borne by the landlord; within the limits of freedom of contract, however, the parties may agree otherwise. In residential leases, these rules are supplemented by the special provisions of the Housing Act (Act LXXVIII of 1993 on certain rules governing the lease and alienation of flats and premises; the 'Housing Act'). Unless otherwise agreed, the landlord is responsible for arranging the maintenance, refurbishment, replacement and renewal of the apartment's finishes, doors, windows and apartment fixtures (the scope of which is set out on a non-exhaustive basis in Section 91/A, point 16 of the Housing Act). The allocation of the costs of such work is different, however: the tenant bears the costs of maintenance and refurbishment, while the landlord bears the costs of replacement and renewal. Certain obligations of the landlord relating to the building and its central installations (the scope of which is likewise set out on a non-exhaustive basis in Section 91/A, point 17 of the Housing Act) cannot be shifted to the tenant even by agreement. This already shows that two separate questions must be addressed: who is responsible for carrying out the work, and who ultimately bears its cost.
The difficulty of drawing these distinctions is well illustrated by the Curia of Hungary's decision in case Gfv.VI.30.308/2023/4, which concerned not a residential lease but another form of use relationship. The decisive issue there was whether the works carried out qualified as maintenance, refurbishment or capital investment. Applying the general rules on leases, the Curia confirmed that, unless otherwise agreed, minor maintenance expenses are borne by the user, while costs going beyond these are borne by the owner. The classification itself, however, became a matter requiring expert evidence. This demonstrates how little guidance a contractual clause stating merely that 'maintenance is the tenant's responsibility' may provide once a dispute arises.
The limits of imprecise allocation of maintenance obligations are demonstrated even more starkly by the Curia's decision Pfv.IV.20.521/2014/4. In the leased condominium apartment, the tenant died of carbon monoxide poisoning only three months after moving in. Expert evidence established that the prolonged lack of maintenance of the gas water heater was one of the factors that contributed to the tragedy. The landlords argued in their defence that maintenance of the apartment fixtures was the tenant's responsibility. The Curia, however, held that the apartment must be handed over in a condition suitable for its intended use and that the apartment fixtures must also be operational. An 'operational' condition is not limited to the fact that an appliance can simply be switched on and made to function. A maintenance obligation placed on the tenant therefore does not override the landlord's obligations existing at the time of handover, nor does it erase a failure that occurred before the apartment was handed over.
This does not mean, however, that every repair must be carried out by the landlord or that every resulting cost is automatically borne by the landlord. For this reason, the agreement should clearly distinguish between the obligation to arrange or carry out particular works and the obligation to bear their cost: which works the tenant must arrange, which remain the landlord's responsibility, when the landlord's prior approval is required, and how urgent defects that cannot await prior approval are to be dealt with.
Common charges: who owes the condominium, and who ultimately bears the cost?
Where the apartment forms part of a condominium, the allocation of costs involves an additional distinction: it is necessary to separate the question of who is obliged to pay the common charges to the condominium from the question of whether, as between the owner and the tenant, the economic burden is ultimately borne by one or the other. As a rule, the obligation to pay common charges to the condominium rests with the co-owner even if the apartment is actually used by a tenant. The parties may nevertheless agree in the lease that the tenant will bear all or a specified part of the common charges. Such an agreement does not, in itself, alter the fact that the co-owner remains liable for payment vis-a-vis the condominium.
For this reason, a clause stating simply that 'the tenant pays the common charges' is often insufficient. It should also be clarified whether the tenant pays the condominium directly or reimburses the amount of the common charges to the landlord; how the payment obligation changes if the amount of the common charges is altered during the year; and whether the tenant-borne amount includes the renovation fund, separately accounted water charges or other items levied by the condominium. The lesson of the decision published as BH2008. 64. points in the same direction: contractual consequences may be based on a tenant's failure to pay condominium common charges that are otherwise payable by the owner only if the tenant expressly assumed the burden of those charges in the lease agreement.
2. The security deposit is not the last month's rent
In everyday Hungarian usage it is usually referred to as a 'kaució' (deposit), but in legal terms the amount will generally qualify as an óvadék, i.e. a security deposit. A security deposit is an accessory form of security: it secures one or more specified claims and, once the right of satisfaction has arisen, allows the beneficiary to satisfy the secured claim directly from the deposit. In a residential lease it is therefore particularly important for the parties to define precisely in the agreement the purpose of the security deposit and the conditions for its use. The landlord may seek satisfaction from the deposit only in respect of claims falling within the scope of the security and only up to the amount of those claims; once the security purpose has ceased, the landlord must account for the deposit.
The Civil Code imposes a specific safeguard against excessive security in residential leases. If the agreed security exceeds three times the monthly rent, the court may, at the tenant's request, reduce it if, having regard to all the circumstances of the case, it is excessive. An amount equal to three months' rent is therefore not a validity ceiling: exceeding it does not in itself make the clause invalid, but opens the possibility of judicial reduction.
With a security deposit, however, its amount is not the only issue of importance; equally important is the precise definition of the claims it secures. The agreement should therefore state clearly whether the deposit covers, for example, unpaid rent, utility charges or condominium common charges payable by the tenant, claims arising from damage exceeding ordinary wear and tear, contractual penalties, or claims arising from missing keys or other accessories handed over to the tenant. The less precisely this scope is defined, the more room there is for a subsequent dispute over the final accounting.
In case Pfv.V.21.944/2014/5, the tenant provided a security deposit equal to three months' rent and later terminated the agreement in circumstances where rent remained payable for the notice period. The Curia accepted that the landlord could satisfy this claim directly from the security deposit. The decision illustrates that a security deposit need not secure only physical damage to the apartment: the types of landlord claims covered by the security are determined primarily by the parties' agreement.
A useful counterpoint is provided by the Budapest-Capital Regional Court of Appeal's decision 16.Gf.40.071/2025/4, which concerned the lease of commercial premises rather than a residential lease. The landlord retained a security deposit of HUF 23.6 million by reference to a reinstatement claim, even though the parties had expressly agreed that the deposit secured monetary debts. Moreover, the landlord itself prevented the tenant from exercising the contractual opportunity to remedy the alleged defects. The Court of Appeal therefore concluded that the landlord had no claim capable of being satisfied from the security deposit and ordered the full amount to be repaid. Taken together, the two decisions demonstrate the essence of a security deposit: the landlord may obtain direct satisfaction from it, but only in respect of a claim that is actually secured by the deposit, and the contractual conditions governing the accounting must also be observed.
A recurring misconception is that the tenant may simply 'use up' the security deposit by not paying the final month's rent – or even several final months' rent. The tenant has no general unilateral right to do so: the existence of the security deposit does not, by itself, extinguish the obligation to pay rent when due. The right to obtain direct satisfaction from the security belongs to the beneficiary of the deposit; once the security purpose ceases, the remaining amount must be accounted for. If the parties wish to agree instead that all or part of the security deposit is to be credited against the final month's rent, this should be stated expressly and unambiguously.
The procedure for settling the security deposit is just as important. The agreement should specify in advance when the landlord must repay the remaining amount, which claims may be deducted from it, and how the legal basis and amount of any deduction are to be substantiated. It is also worth addressing situations in which a final amount – for example, a utility charge – becomes known only after the tenant has moved out. This is where the handover record and photographic condition report become particularly important: what may appear to be mere administration at the beginning of the lease can become decisive evidence at its end.
3. Termination: when the details decide the outcome
Where rent is in arrears, it is easy to assume that the position is simple: if the tenant does not pay, the agreement can be terminated. Failure to pay rent may indeed provide grounds for termination, but in a residential lease the intended legal effect arises only if both the prior demand and the notice of termination comply, in substance, timing and service, with the statutory requirements and the applicable contractual provisions.
A formal or substantive defect in terminating a residential lease is therefore not a minor administrative error. In the Curia's case Pfv.VI.20.605/2020/6, an earlier arrears of only HUF 33,351 became a central issue in eviction litigation lasting several years. In its payment demand, the landlord referred to three invoices from which the tenant could not determine precisely what debt was being claimed. The Curia held that the legal basis and amount of the claim must be stated in the demand in a way that enables the tenant to identify the claim unequivocally. Because this requirement was not met, the notice of termination based on the defective demand was likewise incapable of bringing the lease to an end.
The communication of the notice of termination, and the ability to prove that communication, are equally important. A notice of termination is a declaration addressed to the other party and, as a general rule, becomes effective when it reaches that party; at the same time, the law does not allow the addressee in every case to avoid the legal effects of communication by deliberately frustrating delivery. In the event of a dispute, the landlord must prove that the notice of termination was duly communicated and must also establish compliance with the time limits prescribed by the Housing Act. The agreement should therefore clearly specify the parties' contact details and the methods by which notices are to be communicated, naturally within the limits of the mandatory rules governing when legal declarations take effect.
A properly drafted agreement can substantially reduce uncertainty in these respects, but it cannot by itself make a defective notice of termination lawful or effective. When termination of the lease relationship actually becomes necessary, the legal basis for termination, compliance with the required demands and time limits, and the declaration's compliance with the applicable requirements as to content and communication must all be examined separately.
4. Termination of the lease and recovery of possession of the apartment are two different matters
The ending of the lease and the actual return of the apartment are two separate matters. Ideally, the tenant vacates and returns the apartment to the landlord at the same time as the lease ends. If the tenant does not move out, however, months – and in extreme cases even years – may pass between the end of the legal relationship and the landlord's actual recovery of possession.
When the lease ends, the tenant's contractual right to possess and use the apartment also ends, and the tenant is therefore obliged to return it. If the tenant thereafter continues to use the apartment without legal title – which may include keeping the apartment occupied by his or her belongings – a use fee is payable. A different situation arises where the tenant wrongfully retains the apartment without using it: in that case, under the Civil Code, the tenant must pay the rent stipulated in the agreement for the period of wrongful retention and must also compensate for any damage that would not have occurred but for the retention. Failure to return the apartment may therefore give rise to different financial consequences depending on the circumstances, but none of those claims, by itself, restores possession of the apartment to the landlord.
For this reason, the manner in which the lease ended is crucial. Different rules apply where a fixed term expires and where, for example, the legal relationship is brought to an end by notice of termination. Upon expiry of a residential lease or lease of other premises concluded for a fixed term, Section 183/A of Act LIII of 1994 on Judicial Enforcement (the 'Judicial Enforcement Act' or 'Vht.') provides a special non-contentious eviction procedure. The landlord must submit the application within 60 days from the day following expiry of the fixed term; this is a preclusive time limit. This is an important exception to the common but inaccurate oversimplification that, in the absence of the notarial deed discussed below, recovery of the apartment always requires an eviction action.
The position is different where the legal relationship ends not by expiry of the fixed term but by termination – whether by extraordinary or ordinary termination – and the tenant disputes the lawfulness of that termination. In such cases, eviction may first require a determination of whether the lease actually ended and whether the declaration intended to terminate it was capable of producing the intended legal effect. The case discussed above concerning the HUF 33,351 arrears illustrates precisely this point: because the payment demand was defective, not only enforcement of the debt but the very termination of the lease became disputed.
This is where a notarial deed containing an undertaking to vacate or surrender the premises becomes particularly significant. If the notarial deed satisfies the requirements of Section 23/C of the Judicial Enforcement Act, an enforcement clause may be affixed to it. In practical terms, this means that enforcement of an obligation that is properly specified in the deed and has become due does not in every case require the landlord first to obtain a judgment ordering performance in separate litigation.
At the same time, a document commonly referred to as a 'notarial declaration to vacate' does not, merely by its existence, ensure direct enforceability. Among other matters, the deed must clearly identify the obligee and the obligor, the subject matter, amount and legal basis of the obligation, and the manner and deadline for performance. If performance depends on the occurrence of a condition or a specified time, Section 23/C(2) of the Judicial Enforcement Act also requires that occurrence to be evidenced by a public instrument. The lease agreement and the notarial undertaking must therefore be consistent with one another. In practice, this is also facilitated by the fact that notaries generally request the lease agreement before drafting the declaration to vacate and prepare the undertaking with due regard to its terms.
The significance of a notarial deed therefore does not lie in turning the lease into some kind of 'stronger' agreement. If properly drafted, it may allow the landlord to enforce certain obligations undertaken in the deed directly through judicial enforcement without first obtaining a judgment ordering performance. This can have substantial practical and economic significance in particular where delay in recovering the apartment causes the landlord significant loss of rental income or other financial loss.
5. The apartment is yours. Possession is another matter.
One of the features of residential lease disputes that owners often find hardest to accept is that even an owner cannot enter his or her own apartment without restriction, nor can a tenant who does not pay or refuses to move out simply be excluded by changing the locks. The explanation lies in the legal distinction between ownership and possession.
The Civil Code attaches independent legal protection to the fact of possession. The tenant derives possession of the apartment from the owner and, for as long as the lease remains in force, enjoys possessory protection against the landlord on the basis of that legal title. Ownership therefore does not, in itself, create an unrestricted right of entry or 'repossession'. For this reason, the agreement should already regulate how the landlord may exercise inspection rights, the method of prior notice, the conditions for viewing or entering the apartment, and the procedure to be followed in a genuine emergency or dangerous situation.
When the lease ends, the tenant's legal title to possession also ends, and the tenant's position regarding possessory protection vis-a-vis the landlord is therefore no longer the same as during the subsistence of the lease. This does not mean, however, that the landlord may repossess the apartment by any means of his or her choosing. The Civil Code permits self-help recovery of lost possession only in narrowly defined circumstances; accordingly, the fact that the former tenant is obliged to return the apartment does not make a self-help change of locks or exclusion automatically lawful. Self-help cannot therefore serve as a private substitute for possessory protection proceedings, litigation or enforcement: in a disputed situation, possession must be recovered through the legal procedures provided by law.
The potential consequences are vividly illustrated by the Pécs Regional Court of Appeal's decision Pf.VI.20.028/2014/10, which arose from the lease of commercial premises. After giving notice of termination, the landlord changed the locks by way of self-help and excluded the tenant from the property; it was subsequently established, however, that the termination had not been capable of bringing the lease to an end. The unlawful exclusion had significant financial consequences: the landlord could not claim rent for the period of exclusion and was also required to compensate the tenant for lost profit and damage to its movable property. The damages awarded amounted to almost HUF 4 million.
A separate legal institution must also be taken into account in relation to movable property. Under Section 6:337 of the Civil Code, where real property is leased, the landlord has a statutory lien, up to the amount of the rent and costs payable by the tenant, over the tenant's property located on the leased premises, and while the lien subsists the landlord may prevent the removal of the encumbered items. This does not, however, entitle the landlord to treat the items as his or her own or to appropriate them, and the statutory lien does not automatically secure every claim arising out of the lease. The lien must be enforced in accordance with the rules applicable to it.
6. What should be settled when the lease is concluded?
Case law does not, of course, suggest that every conceivable conflict must be regulated in advance in a hundred-page agreement. It does show, however, that genuinely high-risk issues should not be left to general wording or to the parties' later 'common sense'. In a residential lease, it is particularly advisable to regulate clearly:
— the precise scope of costs payable in addition to rent, including the bearing and accounting of condominium common charges, the renovation fund and individual utility charges, and the consequences of changes in their amount;
— the condition of the apartment at handover, the meter readings, and the fixtures, equipment and other items handed over, preferably in a detailed handover record supported by photographic documentation;
— the rules governing the performance and allocation of the costs of maintenance, repairs, refurbishment, replacement and renewal, together with the procedure for reporting defects and carrying out urgent works that cannot be postponed;
— the purpose of the security deposit, the claims secured by it, the conditions for drawing on it, any obligation to replenish it, and the procedure for final accounting when the legal relationship ends;
— the rules on communications and the service of legal declarations and, within the statutory framework, the provisions on demands and termination applicable to particular breaches of contract;
— the handover procedure to be followed when the legal relationship ends, the return of keys and other accessories, the treatment of movable property left in the apartment, and the possible financial consequences of occupation without legal title;
— the exercise of the landlord's inspection rights and the conditions for entering the apartment, as well as whether, in the particular legal relationship, it is appropriate to require an undertaking to vacate contained in a notarial deed.
Conclusion: a good agreement matters most when the parties no longer agree
As a general rule, the validity of a residential lease agreement does not require countersignature by an attorney-at-law, and a notarial deed is not a general condition of validity either; the agreement must, however, be made in writing. This certainly does not mean that proper legal preparation of the agreement is dispensable.
In a residential lease, the landlord transfers direct possession of a valuable asset to the tenant, while weaknesses in the agreement often become fully apparent only once cooperation between the parties has broken down. An imprecise rule on costs may become an accounting dispute; an inadequately regulated security deposit may lead to a dispute over its use and settlement; a defective demand may result in an ineffective termination; and an unlawful change of locks may give rise to possessory protection proceedings and damages claims.
A notarial declaration to vacate is not a universal solution either, but if properly drafted it may provide a basis for direct enforcement and may enable the landlord to avoid first having to obtain a judgment ordering performance. At the same time, where a fixed term simply expires, the Judicial Enforcement Act provides a separate eviction procedure subject to a preclusive time limit. The appropriate contractual, security and enforcement solution must therefore always be tailored to the characteristics and risks of the particular lease relationship.
The lease agreement that appears cheapest and quickest is not necessarily the one that ultimately costs the least. The true value of the agreement usually becomes apparent only when it is no longer enough to rely on the parties' cooperation. That is when it becomes clear that careful legal preparation is not an unnecessary formality, but one of the most important safeguards for ensuring that clear and enforceable rules are available if a dispute arises.
