In real estate transactions, one of the most common questions arising early in the negotiations is who chooses the lawyer. Many buyers and sellers believe there is a mandatory statutory rule on this, but the reality is simpler: the parties are free to agree on which lawyer should draft the sale and purchase agreement.
Nevertheless, certain customs have developed in practice, under which the buyer chooses the lawyer in the majority of cases.
Why Is a Lawyer Required for a Real Estate Sale and Purchase?
In Hungary, the transfer of ownership of a property requires countersignature by a lawyer or a notarial deed.
The lawyer’s tasks include, among others:
- checking the land registry extract;
- examination of the legal status of the property;
- drafting the sale and purchase agreement;
- identifying the parties;
- handling the land registry procedure;
- preparing the documents required for the registration of ownership.
The lawyer therefore does not merely “write a document”, but serves the legal security of the entire transaction.
Who chooses the lawyer in practice?
The law does not prescribe that only the buyer or only the seller may choose the lawyer. The parties are free to decide on this.
In practice, however, in a significant part of the cases it is the buyer who chooses the lawyer, because:
- they usually bear the lawyer’s fee;
- the security of acquiring ownership is especially important to them;
- they are the one paying the purchase price under the contract.
However, this does not mean that the lawyer represents only the buyer’s interests.
Whose Interests Does the Lawyer Represent?
Many people mistakenly believe that the lawyer drafting the sale and purchase agreement automatically represents the interests of the party who engaged them.
In Hungarian real estate practice, however, the lawyer’s task is to ensure that the contract is lawful and appropriate for both parties.
The lawyer is obliged to:
- act impartially;
- inform both parties;
- draw attention to the legal risks;
- explain the content of the contract to both parties.
The lawyer’s professional responsibility extends not only to their client but to the transaction as a whole.
Can the Seller Choose a Separate Lawyer?
Yes.
The seller may at any time decide to engage their own lawyer to review or comment on the sale and purchase agreement.
This may be especially necessary if:
- the property is of significant value;
- the legal situation is complex;
- the property is encumbered by a usufruct right or another burden;
- multiple owners are involved in the transaction;
- a property held in undivided co-ownership is being sold.
In such cases, both parties may act with their own legal representatives.
Who Pays the Lawyer’s Fee?
There is no mandatory rule on this either. The parties are free to agree on who bears the legal costs.
In practice, however, it is most often the buyer who pays the lawyer’s fee, as they usually choose the lawyer and the security of acquiring ownership is particularly important to them.
The parties may nevertheless agree otherwise, for example:
- sharing the costs equally;
- the seller undertakes to pay the lawyer’s fee;
- certain costs are shared separately.
It is advisable to clarify the agreement already during the preparation of the sale and purchase.
What Should You Consider When Choosing a Lawyer?
A real estate purchase is often one of the most significant financial decisions in a private individual’s life.
It is therefore worth choosing a lawyer who:
- regularly deals with real estate law;
- has adequate experience;
- communicates quickly and clearly;
- supports the completion of the entire transaction;
- also handles the land registry administration.
A decision based solely on the lawyer’s fee can lead to significant problems later.
What Happens If the Parties Cannot Agree?
It may happen that the buyer and the seller want to engage different lawyers, and neither party is willing to give in.
In such a case, several solutions are possible:
- one party accepts the lawyer proposed by the other;
- both parties use their own lawyers;
- they jointly choose a third lawyer.
The most important consideration is that the drafting of the contract should not be delayed and the transaction can be completed safely.
Why Is It Worth Consulting a Lawyer Early in the Negotiations?
Many people only look for a lawyer once they have agreed on all essential points.
In practice, however, many problems can be prevented if the lawyer is involved from the beginning of the process.
Carrying out a prior legal check can help to reveal:
- the ownership status of the property;
- any encumbrances;
- rights of pre-emption;
- usufruct rights;
- questions arising from undivided co-ownership;
- the risks of concluding the contract.
Summary
There is no mandatory statutory answer to the question of who chooses the lawyer. The parties are free to agree on the person of the lawyer, but in practice it is most often the buyer who chooses and pays the lawyer. At the same time, the lawyer drawing up the sale and purchase contract does not serve the interests of one party alone, but is responsible for the lawful and secure completion of the whole transaction.
In practice, a property sale and purchase is a transaction of significant value, so when choosing a lawyer it is worth regarding professional experience and reliability as at least as important a consideration as the amount of the lawyer’s fee.
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