Magazine: Shopping mall ban – Part 2: the decree modification permit

Dr. László Szűcs
lawyer
PricewaterhouseCoopers Legal

In early 2015 the so-called ‘Shopping Mall Ban’ law entered into force: according to this, retail trade units with a floor space above 400m² can only be built, converted or modified (this also includes modernisation) with special permission (in addition to the building permit) from the relevant authorities, namely the Hajdú-Bihar County Government Office. However, on 10 August 2018 a new government decree came out (143/2018 VIII.13. Government Decree), which states that shops bigger than 400m² need this special permission not only if the planned construction, conversion or modification requires a building permit, but also when no building permit is needed for such works. The decree states that in this case a so-called decree modification permit must be obtained.

When do retailers need to get the decree modification permit?

Dr. Réka Mihola
lawyer
PricewaterhouseCoopers Legal

In the following three cases: 1. they want to do retail work in a building bigger than 400m² that didn’t serve as a retail outlet before; 2. they want to convert a 400m² or smaller retail outlet in a way that the works don’t require a building permit, but the gross floor space of the retail outlet will exceed 400m² after the conversion; 3. they want to convert a retail outlet bigger than 400m².

What do retailers need to do if they want to obtain the decree modification permit?

They must submit their request to the notary of the municipality to which the site belongs, together with the technical documentation of the store’s present and planned specifications. The law says that an answer to the request must be given in 60 days, but in practice this may take much longer, e.g. the authorities may ask for further documents, consult various interest representing organisations, etc.

When are the new rules applied from?

They entered into force on 10 August 2018 and they must be applied for conversion works started after this date. Sanctions that can be imposed against those who break the rules: the authorities have the store closed and can impose a fine up to HUF 1 million. The law makes it clear that store closure is a mandatory sanction. What about rented buildings operated as a retail outlet? Already when signing the rental contract, it should be laid down whose task it is to get the decree modification permit, how the procedure can affect the date when the rental period starts and all the related obligations.