Jelzálogjogok

Jelzálogjogok, the Hungarian term for mortgage rights, constitute a form of security interest over real property. When a borrower obtains a loan and pledges real estate as collateral, the lender is granted a jelzálogjog. This right gives the lender priority to recover the loan amount by selling the property if the borrower defaults. The concept has its roots in civil law traditions and is regulated by the Hungarian Civil Code, particularly the chapters dealing with property and obligations.

The creation of a jelzálogjog requires a written contract between borrower and lender, usually notarized, and a registration in the land register. Registration serves to put third parties, such as potential buyers, on notice of the existing mortgage. Until the mortgage is extinguished, the property remains in the borrower’s possession, but the lender has the right to foreclose upon default, following a statutory procedure that protects both parties’ interests.

Jelzálogjogok can be divided into first‑priority and subsequent (second or third) mortgages. First‑priority mortgages enjoy precedence during foreclosure proceedings; subsequent mortgages must wait until earlier ones are satisfied. The law also allows for future mortgage rights, whereby a lender can acquire a mortgage simultaneously with the purchase of the property, ensuring a secured interest.

Overall, jelzálogjogok provide a stable mechanism for financing real estate while safeguarding creditors’ claims. They form a crucial element of Hungary’s real estate financing framework and reflect a balance between borrower rights and lender security.