In June, Property Forum reported on a draft amendment to Hungary’s so-called “mall stop” regulation, which governs the operation of retail units larger than 400 sqm. The government has now adopted the proposal, with the new decree published in the Official Gazette on 18 August.
Under the updated rules, a change of use permit is now required for all commercial buildings with a sales area exceeding 400 sqm if they are to be used for the sale of daily consumer goods. This applies not only to new developments but also to changes of ownership or user. In practice, a new operator must obtain a separate permit even if the previous tenant already held one.
The law also clarifies that even the physical subdivision of a retail space may be subject to approval, provided the resulting new unit will also sell daily consumer goods.
As noted in our earlier coverage, legal experts at Taylor Wessing highlighted that the new approach effectively makes permits person-specific, significantly affecting property transactions and leasing activity in the retail sector. At the time, Dr Dániel Ódor, Partner at Taylor Wessing’s Budapest office, warned that the regulation could increase administrative burdens and reduce market predictability, potentially deterring foreign investors.
With the decree now in force, these concerns have become reality. According to the government’s justification, the aim of the amendment is to protect local communities, safeguard residents’ interests and ensure the controlled expansion of large-scale retail centres.
