Our opinion on the District XIII housing regulation

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A request has been published on the website of the Municipality of District XIII of Budapest, which asks for opinions on the draft municipal decree on the rules for renting and disposing of flats and non-residential premises owned by the Municipality. The Streetlawyer Association considers this a good step and an example to follow, that the District XIII government submitted the draft housing regulation for social discussion.

In the following, we present the professional opinion sent to the local government (with some omissions related to Hungarian wording), with which we wish to contribute to the adoption of the District XIII housing decree that is transparent, fair and in line with higher-level legislation.

to the Municipality of District XIII

Dear Mr Mayor!

The request was published on the website of the Local Government, which enables to opinion the draft of Local Government Decree on the rules of renting and alienating flats and non-residential premises owned by the Local Government (hereinafter: the draft). We consider it an extremely good step and an example to follow that the District XIII government submitted the draft housing regulation for social discussion.

The Streetlawyer Association has been representing the interests of homeless people and people living in housing poverty by providing free legal aid for more than ten years, therefore we would like to contribute to the District XIII to adopt a housing decree that is transparent, fair and in line with higher-level legislation.

We also came to the conclusion in our publication entitled Punitive Local Governments [“Büntető Önkormányzatok”], published in October 2019, that housing regulations in most districts of Budapest need to be significantly amended.

There are several solutions in the regulation of the district XIII municipality that we agree with and consider to be followed. Such a positive example is that the local government also sets deadlines for its own bodies and officials, which helps in predictable decision-making, promotes legal certainty and enables residents to exercise their rights. We also appreciate that in the capital District XIII pays more attention than any other district to expanding the stock of district-owned rental housing.

Our comments and suggestions on the draft are summarised in the following thematic sections:

– Definition of decision – making powers
– Exercise of discretion, discretion
– Normative clarity and inaccurate wording
– Provisions contrary to higher level legislation
– Other comments

1. Defining decision-making powers

The draft does not clearly define which body is entitled to make the various ownership decisions related to the rental of flats. Annex 2 of the Organizational and Operational Regulations (SZMSZ), which is referred to in several places in the draft, contains conflicting provisions in connection with the exercise of ownership rights. These provisions are difficult to interpret and do not always make it clear which specific decision the mayor falls into and which falls within the remit of the committee. The term “practitioner of the right of ownership as defined in the SZMSZ” used in the draft does not make it clear which practitioner detailed in the SZMSZ is being referred to.

In addition, the draft names “Lessor” in a number of places. If the “Lessor” means the municipality as owner, it would be advisable to include this in the interpretative provisions. At the same time, it is necessary to ensure that in the text of the decree, “Lessor” always means the municipality (as owner of a legal entity). For example, in Section 8 (5), the “Lessor” provides for leasing until the condition is met, although it is clear that it would be necessary to nominate a decision-maker on behalf of the municipality, which may be the representative body or under delegated powers the mayor or a committee. Nor can it be clearly decided on the basis of the joint interpretation of the decree and the SZMSZ who or which body is entitled to make this decision. Similarly, the “Lessor” is entitled, for example, to refuse to enter into a contract under Section 10 (1), and there are a number of other examples in the text of the draft. In addition, the regulation names “lessor”, “decision-maker” or “responsible” without defining exactly which category it means. Not only can this be confusing for district residents, but it can also hinder the internal mechanisms of the municipality.

It is recommended that in order to ensure normative clarity and transparency, the bodies and persons entitled to the ownership of municipal flats should be authorised by the representative body to make decisions directly in the Housing Decree, together with a detailed definition of their tasks and powers.

2. Exercise of discretion

In the opinion of the Streetlawyer Association, the basic condition for transparent decision-making is that the aspects to be taken into account in the decisions are also fixed by law. Therefore, we do not agree with the wording of the legislation, which provides the decision-maker with a discretionary decision-making option without defining a clear set of criteria. In the case of fairness decisions, it is also necessary to specify the circumstances in which the requesting client can expect a fair trial of his or her case. This also follows from the requirement of equal treatment and the right to a fair trial.

In our opinion, the a number of sections of the draft do not meet this requirement. […]

3. Normative clarity and inaccurate wording

Inaccurately defined or undefined concepts are also present in the proposal. […]

Legal titles of the lease

In our opinion, renting by application is also an legal title, therefore it would be expedient to indicate it structurally in Section 4 (3), especially considering that according to Section 5 this procedure is the main rule and the other legal titles are exception.

At the same time, there is no provision as to who, in what procedure, in what criteria, decides how many and which apartments will be rented without the application procedure defined as a general rule. In our opinion, the determining element of transparent housing management is also that the local government also regulates the process during which it decides which apartment it intends to utilise in the framework of which procedure.

Confusing, incorrectly worded sentences

The proposal has a number of confusing, incorrectly worded sentences. […]

4. Provisions conflicting with higher level legislation

In our opinion, Section 3 (2) of the Tenancy Act contradicts the provision of Section 24 of the draft, which allows the Landlord to terminate in the event that the tenant fails to provide proof of the reason for the absence exceeding two months. According to the relevant section of the Tenancy Act, during the absence declared by the tenant, the local government may not terminate the contract with reference to this. The Tenancy Act does not authorise the local government to set stricter conditions than the notification obligation specified in the law.

Pursuant to Section 26 (2) of the draft, the Agent may inspect the rental property several times a year. Section 12 (5) of the Housing Act stipulates that the frequency of inspections within one year must be specified in a municipal decree. In our view, the term “multiple times” does not clearly define the frequency, it would be necessary to define it precisely, even by applying the “maximum” constraint. The current wording even provides for the possibility of daily inspections, which would clearly be an unacceptable disturbance. It would also be necessary to regulate the need to inform the tenant in advance of the inspections, as well as the precise rules for how long before the inspection the notification should be sent, in what form and what to do if the date is not suitable for the tenant and for this reason, he was unable to provide access to the apartment and the possible consequences of the inspection process.

Section 3 (e) of the draft defines the concept of an unlawful home usage (squatting) . At the same time, the exact definition of squatting is set out in Act II of 2012 on infractions, infraction procedure and the infraction records system, contained in Section 167 of the Act.

According to the law:

Section 167. A person who occupies or moves into an empty dwelling or a non-dwelling falling within the scope of the legislation on the lease or management of premises without the legal declaration of the body or person authorised to establish the tenancy, commits an infringement.

The draft redefines this legal concept without authorization.

5. Other comments

Strict conditions

The wealth condition specified in Section 20 (1) (two hundred and fifty times the minimum amount of the old-age pension, ie HUF 7,125,000 according to the legislation in force) is such a low amount, especially for the whole family, which means the ownership of a rural farm, one or two cars can exceed this value . However, this proprietary value does not in any way guarantee that the family concerned will have sufficient income to pay the higher amount of rent.

In our view, it is also too strict a rule to set the usage fee at five times the rent (Section 28 (4)) and to exclude applicants from the possibility of applying for two years in certain cases (Section 13 (9)). Nor does the draft specify in these cases the conditions under which a decision unfavorable to those concerned may be mitigated, what reasonable individual circumstances the decision-maker must consider in order not to apply the most serious consequences.

Proofs and verifications

From the documents listed in Section 20 (3) to be submitted to prove entitlement to social rent, it is not clear why it is necessary to obtain a certificate from the educational institution for family members studying full-time, as the conditions do not include any indication to that effect. It also seems pointless to require proof of the placement and health of the child, as these aspects do not play a role in decision-making either.

Bureaucratic hurdles that are irrelevant to the application process put families who are already at a disadvantage in a difficult position.

Exclusion of right to remedy

Section 12 (6) excludes the possibility of a legal remedy related to the assessment of the application, and Section 13 (1) excludes the possibility of a legal remedy against the application decision.

In our opinion, in view of the fact that the mayor or the committee, acting on behalf of the owner municipality instead of the representative body, takes decisions under delegated powers, it would be appropriate to provide for the possibility to review the decisions, which would also allow the representative body to control the compliance with the legislation which it lays down.


Article 30 of the draft decree regulates subletting. As a general rule, no consent can be given for subletting, but the paragraphs defining the exceptions allow the flat of a tenant placed under guardianship or a minor to be utilised by the minor tenant’s parent or guardian by subletting. It is not clear what is the purpose of a provision that allows the tenant to utilise municipal property. It appears that this possibility is contrary to the requirement of responsible management of municipal property.

Missing provisions

In our view, the regulation lacks regulation on the content of contracts. It is expedient to establish the contractual elements that the municipality intends to enforce in all tenancy agreements at the level of regulations, as this will ensure that all prospective tenants can request an apartment under conditions that can be known in advance.

In summary

In addition to the above, we recommend that the local government exercise the authorization provided for in Section 84 (1) of the Tenancy Act and provide for the application of a register of names in order to rent on the basis of the social situation. For those who are socially deprived, a system of applications that does not require continuous monitoring of applications is much more favorable, and the municipality can save its administration from significant administration if it is not necessary to assess the eligibility of the same applicants several times a year.

We hope that with the above remarks we can contribute to the further clarification of the housing regulation of the local government, to make it more transparent and comprehensible, which will have a positive impact for both the local government and the residents.

If You deem it necessary, the volunteer lawyers of the Streetlawyer Association will be happy to take part in further consultations, where we will share our further comments with you.

Budapest, 15 May 2020

Best Regards,
Dr. Ágnes Kalota
Streetlawyer Association

Photo source: Fortepan / Sándor Bojár