In its landmark decision of 19 December 2025 (V ZR 15/24), the German Federal Court of Justice (Bundesgerichtshof, BGH) confirmed the permissibility of so-called Nachbarerbbaurechte, i.e. building rights relating to structures extending across neighbouring plots of land. The ruling has significantly enhanced legal certainty for complex real estate developments in Germany that span multiple properties.
This raises an important question for investors and developers active in Central and Eastern Europe: what is the relevance of this development under Hungarian law? Does Hungarian law allow comparable solutions, and how are buildings situated on more than one plot treated?
The Hungarian starting point: land-based ownership with functional flexibility
Hungarian property law is traditionally based on the principle that a building forms an integral part of the land on which it is constructed. As a general rule, ownership of the land determines ownership of the building (Section 5:14 of the Hungarian Civil Code).
At the same time, Hungarian law has gradually introduced flexible property law instruments designed to accommodate modern development needs. These include, in particular:
- long-term land use rights,
- usufruct rights, and
- most importantly, the right to build, which since 2023 exists as an independent, transferable in rem right under Hungarian law.
These instruments allow developers to separate land ownership from the economic use of buildings in a legally secure and marketable manner.
Buildings extending over multiple plots – a practical issue in Hungary as well
In practice, Hungarian real estate developments increasingly involve projects that:
- extend over several plots with different owners,
- take the form of shopping centres, office complexes or mixed-use urban developments, and
- cannot be physically separated along plot boundaries without disproportionate damage.
Until now, such projects have often relied on:
- easements,
- contractual use arrangements, or
- complex corporate structures.
However, these solutions do not always provide sufficient long-term legal certainty, bankability or transferability, particularly in large-scale urban projects.
Lessons from the German decision for Hungarian practice
Although the German Erbbaurecht and the Hungarian right to build are not identical legal concepts, the reasoning of the BGH decision is highly instructive from a Hungarian perspective.
The German court made it clear that:
- a building right is not invalid merely because the building extends onto neighbouring plots, and
- the physical indivisibility of a structure across property boundaries does not, in itself, render the underlying legal arrangement unlawful.
This approach is consistent with the broader trend in Hungarian property law to prioritise economically viable and contractually well-structured solutions over rigid formalism.
The key challenge under Hungarian law: what happens when the right ends?
As in Germany, the most critical legal questions arise not when such rights are created, but when they terminate. In particular:
- who becomes the owner of an indivisible building extending over several plots,
- whether compensation is payable and how it should be calculated, and
- how termination is handled in enforcement, insolvency or succession scenarios.
The general rules of the Hungarian Civil Code on components, encroachment and unjust enrichment do not always provide clear or commercially satisfactory answers. As a result, contractual regulation plays a decisive role in ensuring predictability and value preservation.
Forward-looking structuring is essential
One of the most important takeaways from the German BGH ruling—fully applicable in the Hungarian context—is that these issues must be addressed at the structuring stage, not postponed to an uncertain future.
Particular attention should be paid to:
- termination scenarios,
- the legal fate of the building upon expiry or termination of the right,
- compensation mechanisms and valuation methods, and
- bankability and transferability considerations.
Although these issues may only materialise decades later, they can have a direct and immediate impact on the economic value and financing of the project.
Conclusion
The German Federal Court of Justice’s decision reflects a broader European trend towards adapting property law to the realities of complex urban developments. While Hungarian law relies on different legal instruments, the underlying challenges—and the need for careful legal design—are largely the same.
In Hungary as well, it is becoming increasingly clear that the success of multi-plot real estate developments depends on thorough, forward-looking and well-structured legal planning.
Dr. Katona Géza, LL.M. ügyvéd (Rechtsanwalt / attorney at law)
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Katona és Társai Ügyvédi Társulás
(Katona & Partner Rechtsanwaltssozietät / Attorneys’ Association)
H-1106 Budapest, Tündérfürt utca 4.
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