Attorney’s escrow in a Hungarian property purchase: how is the purchase price protected?

In a Hungarian property purchase, payment of the purchase price and acquisition of ownership are separated in time: ownership passes upon registration in the real estate register, not upon signature of the contract. During this interim period neither party wishes to be the first to take the risk. The seller does not wish to give the consent required for registration of the buyer’s ownership without receiving the purchase price, and the buyer does not wish to pay the purchase price until it is certain that the property will become theirs in accordance with the contract. A deposit with an attorney-at-law – commonly referred to as an attorney’s escrow – provides a solution to this situation.

What is an attorney’s escrow?

Under section 47(1) of Act LXXVIII of 2017 on the professional activities of attorneys-at-law (the “Attorneys Act”), an attorney-at-law may receive money, securities or documents as a mandate, and keep them in safe custody and handle them as a deposit. In a property purchase it is typically the buyer who deposits the purchase price – or part of it – with the attorney-at-law, who releases it to the seller when the conditions set out in advance in the contract are met: for example, following registration of the buyer’s ownership, deletion of a mortgage lien, or handover of possession.

When is it advisable?

An escrow provides security in particular in the following cases:

• where the property is encumbered by a mortgage lien and the outstanding loan is to be repaid from the purchase price;
• where the parties wish to have security for payment of the purchase price until ownership is registered;
• where the seller or the buyer lives abroad and the parties do not meet in person;
• where the purchase price is payable in several instalments, each subject to different conditions.

The deposit contract

Under section 47(2) of the Attorneys Act, the deposit contract must be concluded in writing. A separate instrument is not necessarily required, however: under paragraph (3), the terms of the deposit may also be included in the contract of sale countersigned by the custodian attorney-at-law, provided that both the depositor (the buyer) and the person to whom the deposit is to be released (the seller) are parties to it.

The deposit contract must specify the fee for handling the deposit, or state that the deposit service is free of charge [section 50(1) of the Attorneys Act]. It must also indicate the bank keeping the escrow account and the number of the subsidiary account [section 49(5) of the Attorneys Act].

The buyer may terminate the contract on the deposit of the purchase price only if expressly entitled to do so in the deposit contract [section 47(4) of the Attorneys Act]. This rule protects the seller: the buyer cannot unilaterally withdraw the purchase price once deposited. Any provision of the deposit contract excluding or limiting the attorney-at-law’s liability in connection with handling the deposit is null and void [section 47(5) of the Attorneys Act].

Where is the money while it is in escrow?

The attorney-at-law holds the deposited money in an escrow account, separated from all other funds, and on a separate account or subsidiary account for each deposit [section 49(1) of the Attorneys Act]. Money received must be placed in the escrow account within one working day or, for money received abroad, within three working days [section 49(2) of the Attorneys Act]. The depositor may request to receive information on the account balance directly from the account-keeping bank, at the depositor’s expense [section 49(1)(b) of the Attorneys Act].

Unless otherwise agreed, any interest on the amount held in the escrow account is due to the depositor, while the account-keeping costs are borne by the attorney-at-law [section 50(2) of the Attorneys Act]. The attorney-at-law may not use or exploit the deposit for any purpose other than that of the deposit [section 48(2) of the Attorneys Act].

The bar association’s register of deposits

The attorney-at-law must record the data of any deposit amounting to at least twice the monthly mandatory minimum wage in the electronic register of deposits operated by the regional bar associations, within one working day [section 51(1) and (3) of the Attorneys Act]. The register assigns a unique identifier to the deposit.

The deposit contract takes effect only when the attorney-at-law has communicated to the depositor the bar association’s electronic confirmation, which contains the unique identifier of the deposit and the number of the escrow account or subsidiary account [sections 47(2) and 51(3a) of the Attorneys Act]. Thereafter, by providing the custodian attorney-at-law’s bar identification number and the unique identifier of the deposit, the depositor may request information on the deposit from the bar association by electronic means [section 51(5)(a) of the Attorneys Act].

Larger deposits

An attorney-at-law may accept the handling of a deposit of forty million forints or more only if covered by supplementary liability insurance of at least forty million forints per insured event [section 47/A(1) of the Attorneys Act]. For a deposit of four hundred million forints or more, the deposit contract must also be countersigned by a second, co-operating attorney-at-law; the deposit may be released only with that attorney’s written approval, and the two attorneys are jointly and severally liable for its proper release [section 47/A(2), (5) and (6) of the Attorneys Act].

What should the buyer check?

• Whether the contract states precisely on what conditions and within what time limit the deposit is to be released, and what happens to the deposit if the transaction falls through.
• Whether they have received the bar association’s confirmation containing the unique identifier of the deposit.
• Whether the contract indicates the bank keeping the escrow account and the number of the subsidiary account.
• Whether the fee for handling the deposit, or the fact that it is free of charge, has been recorded.

You can find more about the steps of a property purchase on the Real estate law page, and about the expected costs in the fee calculator.

This article provides general information and does not constitute legal advice. Legal position as at October 2026. This English version is provided for information; in the event of any discrepancy, the Hungarian version prevails.