In the case of undivided joint property ownership, co-owners always have a statutory right of pre-emption. It works differently in the case of condominiums (multiple separate units—apartment, garage, storage): in this case, the right of pre-emption of the other owners must be recorded in the Condominium Deed of Foundation and indicated on the master sheet of the condominium in the land registry. The absence of this registration is decisive on the matter, as pursuant to Sections 5:171–173 of the Civil Code, a right of pre-emption is effective if it has been registered in the land registry.
The question is, therefore, what is the situation when the attorney drafting the sales contract for a condominium unit acts solely by checking the master sheet of the condominium to see whether a registered right of pre-emption is provided for the other owners.
In its ad hoc decision No. Pfv.VI.20.087/2020/10, the Curia explained that a right of pre-emption stipulated in the Deed of Foundation provides legal protection to pre-emption right holders only when accompanied by its registration in the land registry. According to the case, the buyer purchased the condominium garage subject to the proceedings without the seller calling upon the other owners to make a statement regarding their right of pre-emption, given that although the Deed of Foundation provided for the right of pre-emption, its registration in the land registry was omitted. The attorney drafting the sales contract, relying on the completeness and public authenticity of the land registry, did not check the Deed of Foundation and thus did not take into account the provision regarding the right of pre-emption recorded therein. Based on the sales contract, the competent land registry office registered the buyer's ownership in the land registry. One of the co-owners challenged the contract: they requested that the competent court declare the contract ineffective in relation to them under Section 6:223 (1) of the Civil Code and establish that the purchase and sale was concluded between them and the seller according to the provisions of the original contract. In the lawsuit, the seller referred to the buyer's bad faith. According to the buyer's statement, their conduct was in good faith, as they acquired property ownership in good faith and for consideration relying on the data in the authentic public registry (land registry), and in the absence of registration there, they did not have and could not have had knowledge of the existence of the right of pre-emption.
In its judgment, the court of first instance stated that although the seller and buyer had breached the right of pre-emption, it dismissed the claim of the plaintiff (the co-owner entitled to pre-emption), given that the pre-emption beneficiary cannot make a claim against a buyer acting in good faith (due to obligational effect); furthermore, according to the court's reasoning, the buyer cannot be expected to obtain the Deed of Foundation or otherwise investigate a potential right of pre-emption, it being sufficient to check for the existence of the entry on the master sheet relying on the data in the public registry.
The pre-emption beneficiary successfully appealed the first-instance judgment: the court of second instance overturned the judgment, citing Section 6:223 (1) of the Civil Code and Civil Department Opinion No. 2/2009 (VI.24) PK: in its judgment, it declared that the contract was ineffective against the plaintiff and ordered the competent land registry office to register the ownership of the pre-emption right holder. Explaining its judgment, the second-instance court argued that the acting attorney, in breach of professional rules, failed to obtain the Deed of Foundation, and thus, as the buyer's representative, could not gain knowledge of the existence of the pre-emption right. This failure on the part of the representative is attributable to the buyer, and thus the buyer is to be considered to have acted in bad faith. Against the final judgment, the buyer submitted a petition for judicial review, requesting that the judgment of the court of first instance be upheld.
In the judicial review procedure, the Curia established that the right of pre-emption existed as recorded in the Condominium Deed of Foundation, but due to an omission, it had not been registered in the land registry. A right of pre-emption is rendered effective in rem (dologi hatályú) by its registration in the land registry, in which case it can be invoked against anyone who acquired a right in the property following registration. If registration is omitted, the agreement establishing the right of pre-emption has merely obligational effect (in personam), meaning it creates rights and obligations solely in the relationship between the signatories of the Deed of Foundation. Therefore, a breach of rights deriving from the contract can only be invoked by the contracting parties in their legal relations with one another, and claims arising therefrom can likewise only be enforced against each other. Based on this, judicial practice established that the holder of an unregistered pre-emption right in the land registry cannot invoke this right against a buyer who acquires property in good faith, for consideration, and relying on the authentic public registry.
Under the Civil Code, a buyer acquiring property in good faith and for consideration—who, under the circumstances, did not know and could not reasonably have been expected to know that the public registry did not align with the effective Condominium Deed of Foundation—cannot be held liable for the fact that the right of pre-emption was not registered in the land registry. The Curia agreed with the second-instance court that the attorney representing the buyer did not act with due care regarding the purchase and sale, and that this is attributable to the buyer; however, the attorney's duties do not expressis verbis include searching for the Deed of Foundation, review of the condominium's master sheet being sufficient. According to the Curia, it depends on the care and decision of the acting drafting attorney and the buyer whether to locate and check the effective Deed of Foundation prior to signing the sales contract; omitting this may pose a risk to the buyer, but in no way grounds the ineffectiveness of the contract or bad faith on the part of the buyer. In its ad hoc decision, the Curia ruled that the buyer's bad faith was not proven; therefore, the buyer qualifies as a good-faith acquirer of rights, making the plaintiff's claim against them unfounded, and thus the Curia upheld the buyer's acquisition of ownership.
Based on the above, the conclusion is that although in this case the buyer could in good faith rely on the public land registry, the drafting attorney acts with complete precision if they routinely obtain the effective condominium deed of foundation to verify whether a right of pre-emption exists.