Background information

Under Section 3 of the government decree 47/2020, businesses in the sectors of catering, entertainment, tourism and passenger transport will receive protection from a rent increase and termination of rental contracts until at least the end of June, after which the ban can be extended. Rental leases for these companies cannot be terminated in this period so tenants cannot be evicted. It is not clear if this means on any grounds at all or whether landlords can exercise some of their rights to terminate.

Content of measure

Under Section 3 of government decree 47/2020, the sectors selected as one most affected by the COVID-19 crisis will receive protection from rent increase or rental contract termination. The measure applies to sectors where businesses typically rent rather than own their premises and where the economic impacts of COVID-19 have caused financial strains. Although the measure does not specify if rental contracts are banned from termination, even if no rent is paid by the tenant at all, experts agree that with the eviction ban in place tenants are likely to get away with not paying at all during the 'state of emergency' period while their business is likely to be closed down.

Use of measure

The measure could affect about 50,000 companies, mainly SMEs in sectors vulnerable to the impacts of the pandemic. The rule overrides any rent increases stipulated in the rental contract. Legal experts say that if tenants do not pay rent at all, landlords are likely to seek agreement on special terms rather than lose clients on a shrinking property rental market. Analysts argue that the effectiveness of this measure in supporting businesses is very low, since under the current circumstances property owners were not likely to raise rents.

Target groups

Workers	Businesses	Citizens
Does not apply to workers	Sector specific set of companies	Does not apply to citizens

Actors and funding

Actors	Funding
National government Company / Companies Local / regional government	Local funds National funds No special funding required

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	No involvement as case not in social partner domain	No involvement as case not in social partner domain
Form	Not applicable	Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

• Unknown
• Main level of involvement: Unknown

Involvement

Unknown.

Views and reactions

There was no social partner involvement in the drafting of this measure.

Sectors and occupations

This case is not occupation-specific.

Sources

• 18 March 2020: Government decree 47/2020 (EN)
• 19 March 2020: Orban lets caterers not pay any rent? (index.hu)
• 08 February 2021: Govt decree 52/2021 on rent waivers (English)
• 02 January 2022: Govt decree 99/2021