New ‘Plaza-stop’ rules

1. Recitals – Plaza-stop I.

The so-called plaza-stop I. rules were effective as a part of Act LXXVIII of 1997 on the Formation and Protection of the Built Environment (hereinafter: “Act”) from January 1, 2012 until January 1, 2015, according to which rules the construction of any commercial buildings above gross area of 300 sqm and the expansion of any commercial buildings above gross area of 300 sqm was prohibited unless an exemption was granted by the minister of national economy based on the opinion of a committee formed for the evaluation of such entitlement. The political background of the plaza-stop I. rules was to hinder the expansion of the multinational food chain companies.

Following the expiry of the plaza-stop I. rules, a new set of regulations were introduced as plaza-stop II. rules also as a part of the Act, with effective from February 1, 2015, which has been in force since then.

2. Current regulation– Plaza-stop II.

Acting authority. Although, the size restriction in plaza-stop I. rules (gross 300 sqm) was loosened up to gross 400 sqm, a brand new, special procedure was introduced by involving a special authority. i.e. the Head of the Hajdú-Bihar County Governmental Office (hereinafter: “Governmental Office“).

Affected constructions. As a main rule the special authority assessment (in Hungarian ‘szakhatósági állásfoglalás’) of the Governmental Office – vested with nation-wide jurisdiction – is required to the construction, conversion of a commercial building with a gross area above 400 sqm and to the expansion of an existing commercial building to a gross area above 400 sqm provided that these are subject of a building permit.

Assessment forms. The special authority assessment can be obtained as part of the building per-mit procedure or prior to requesting the building permit procedure a preliminary assessment of the special authority (in Hungarian ‘előzetes szakhatósági hozzájárulás’) may be obtained. The provisions of both procedures are regulated by the Governmental Decree No. 5/2015 (I.29.) (hereinafter: “Decree”). The Governmental Office shall give its special authority’s assessment or the preliminary assessment (hereinafter together: “Assessment”) within sixty days. The preliminary assessment can be used within one year in a building permit procedure.

Content of application. The application for Assessment shall contain e.g. the details of the re-questor, the planned area, profile, reason why such building is necessary, planned handover date, environmental and traffic details, catchment area, visual design of the commercial building and the related supporting facilities, as well as the key data, proposed dimensions etc.

Special committee’s opinion. During the procedure the Governmental Office shall obtain the Assesment of a special committee (formed from delegates of the minister of building and construction regulations and regulatory procedures, and the minister of trade and commerce, the minister of regional development and land use planning, the minister of environmental protection and the minister in charge of transportation (hereinafter: “Committee”). [We note that the name of the members of the Committee is not published.] For the decision of the Committee simple majority of the members is necessary. The Committee shall submit its final opinion to the Governmental Office fifteen days prior to the deadline set to the Governmental Office to issue its Assessment. The Committee issues its opinion based on the set of criteria recorded in annex no.3 of the Decree. The Committee shall reason its opinion.

Deciding factors. When deciding on the Assessment, the Governmental Office shall elaborate its position on the impacts the commercial building may have on the municipality and its immediate vicinity in terms of environment, transportation, urban planning and urban development issues, to determine whether the commercial building is considered to induce detrimental consequences which are likely to disproportionately exceed its advantages. The Governmental Office shall con-sider the Committee’s opinion however its decision can differ from the Committee’s opinion.
Appeal. The Assessment of the Governmental Office can be appealed, in such case the Heves County Governmental Office shall proceed in the second instance.

3. Alteration permission

In addition to the plaza-stop II. rules, with effective from August 10, 2018 a new provision of the Act introduced the alteration permission procedure. The detailed rules thereof were specified in the Governmental Decree No. 143/2018. (VIII.13.).
Affected activities. According to the new rule the following building activities are subject to the alteration permission procedure:

  • change of the function of any building with a gross area above 400 sqm to commercial function;
  • alteration of any building with commercial function as a result of which alteration the gross area of the building will exceed 400 sqm;
  • any alteration (regardless whether it is subject to building permit or not) of a building with commercial function with a gross area above 400 sqm.

Alteration means any construction activity carried out on an existing building, building part, individual functional unit or premises in order to change the layout or external appearance – which construction does not increase the internal volume.

Acting authority. The request for alteration permission procedure shall be submitted to the competent notary (acting as the first instance authority) based on the location of the commercial building that is intended to be altered. The second instance authority is the Governmental Office of Budapest Capital or the given county (depending on the location of the commercial building).
Procedure. Within 5 days from the receipt of the request for the permit, the notary shall send the request to the Governmental Office for the issuance of the Assessment and the same rules and procedure apply as in case of a Plaza-stop procedure (see above in Clause 2).

In case the commercial building is subject to further alteration, which was not covered by the previously issued alteration permit, then a new alteration permit shall be requested by the applicant.
Consequence of non-compliance. Should the alteration of a commercial building be carried out without obtaining the alteration permit, then the first instance authority prohibits the commercial utilization of the building and imposes a fine on the person who should have submitted its application for the permit. The maximum amount of the fine equals to the amount of the procedural fine (this shall be calculated based on the rules on the building fine).

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