How does a creditor take security over assets in Hungary?
In Hungary common types of security include mortgages over moveable assets (fixed charge) and immoveable assets (real estate mortgages), pledge, floating charge, pledge over rights and receivables, and cash and security deposit. Bank lenders also use security assignment. In case of a real estate mortgage, floating charge, fixed charge and pledge over certain rights (e.g.: pledge over quotas of a limited liability company) the security needs to be registered in the corresponding public record (i.e.: Land Registry, Chattel Register of the Notaries, or the Firm Registry) for valid establishment. There are various quasi security interests, such as banker’s rights of set off, account debit order, and right of purchase. A right of purchase is usually registered in the Land Registry. This is not required for the valid establishment of this collateral. Otherwise securities are established in written (and in certain cases, notarised) contracts.
