Construction Law
The legal background of construction investments is complex, often changing, and not infrequently a source of conflicts—especially in the case of large-scale projects involving multiple parties. In our experience, one of the keys to successful implementation is not only precise technical preparation but also a well-structured contractual system and conscious risk management from the early stages of the investment.
Our office has decades of experience in construction law consultancy and litigation related to corporate investments. We have formed a dedicated team specialising in the preparation of construction contracts and the management of construction disputes—members of our team have real industry experience both as lawyers and as former legal directors of leading construction companies.
What exactly is construction law?
Construction law encompasses the regulations governing the preparation, execution, and handover of construction investments, as well as warranties and guarantees. These regulations affect the design process, permitting procedures, quality assurance, and supervision of execution. As an investor or contractor, it is crucial to be aware of these regulations already in the project preparation phase, thus avoiding later conflicts or administrative sanctions.
Construction contracts—the legal foundation everything depends on
In a complex construction project, the contract for services is not just a legal document but also the business framework for cooperation. While the system of construction law provides a framework, success requires the creation of a contractual structure tailored to the specific needs of the project.
According to our experience, the most common disputes revolve around penalties, contractor’s fees, accounting for extra work, technical handover and acceptance, and the calling of bank guarantees. Our office has practical experience in managing these issues—be it in consultancy or litigation.
We pay special attention to lawsuits based on the opinion of the Performance Certification Expert Body (TSZSZ) and to the practice of developer’s escrow management, which is also a frequent source of conflict between main contractors and subcontractors.
Managing disputes and problems with construction law
Even with the most careful preparation, disputes can arise. Conflicts between investors and contractors typically result from deadline delays, quality complaints, or accounting for extra and additional works. In such cases, construction law provides clear guidance on the rights of the parties and on how to resolve disputes effectively, either through litigation or out-of-court settlements.
Dispute resolution: ordinary court or arbitration?
Although most cases are heard before ordinary courts, for large-scale construction contracts we specifically recommend including an arbitration clause for dispute resolution. This can be particularly advantageous if international partners are involved or if the project requires industry-specific expertise that traditional court proceedings cannot effectively address.
Our firm regularly provides legal representation in arbitration proceedings—in both Hungarian and English. We have especially significant experience in construction arbitration cases, where the subject of the dispute is contract performance, financial disputes, warranty issues, or delay penalties.
Cooperation with technical experts—an essential condition for complex construction disputes
In complex construction disputes, not only legal but also technical issues play a decisive role. Therefore, we work with Hungarian and international construction experts who complement legal representation with technical opinions, estimates, and deadline analyses.
This integrated approach enables us to present our position to the court or arbitration tribunal in an understandable and well-founded manner, significantly increasing the chances of effective representation.
Proactive legal support throughout the entire project cycle
In construction law, not only the resolution but also the prevention of disputes is of paramount importance. Our team provides support throughout the entire project lifecycle—from the planning phase, through contractual negotiations, to project closure, including handover procedures and the warranty period.
Our goal is to provide our clients not only with legal security but also with business stability. All our advice is backed by decades of experience in the construction industry, accurate sectoral knowledge, and strategic thinking.
If you are building, we ensure your legal foundation.
Contact us if you need legal representation, the development of a contractual structure, or support in dispute resolution—whether in a Hungarian or international context.
1. Why is it worth involving a lawyer already at the contract preparation stage?
The construction contract is not just a legal document but also the business and operational framework of the project. An experienced lawyer helps establish conditions during the planning that minimise the chances of later disputes. Moreover, a lawyer with industry experience will adapt the contractual structure to real market practices.
2. What types of legal disputes most commonly arise during construction investments?
The most common contentious issues include penalties, contractor’s fees, accounting for extra works, refusal of performance certification, and calling in bank guarantees. These are often the result of differing interpretations, incomplete documentation, or unclear contractual provisions. With a properly prepared contract, these disputes can be prevented or managed more effectively.
3. When is it advisable to include an arbitration clause in a construction contract?
For high-value, complex projects, especially with international parties, it is advisable to use arbitration clauses. This provides a faster, more specialised, and more flexible solution compared to ordinary court proceedings, and the judgment is more easily enforceable abroad if necessary.
4. What is the role of the Performance Certification Expert Body (TSZSZ) in litigation?
The TSZSZ’s expert opinion can be particularly important in disputes between contractors and clients, for example, if performance certification is refused or the technical compliance of the work is disputed. The court considers the expert opinion, though it is not binding. It is advisable to consult a lawyer even before approaching TSZSZ, to ensure the correct documentation is submitted.
5. How does a lawyer help resolve disputes over contractor’s fees?
The determination and accounting of contractor’s fees are often disputed, especially in the case of modifications or extra works. The lawyer helps clarify which fee elements are legitimate, what documentation is required, and how claims can be enforced effectively. They also provide strategic support during litigation or settlements.
6. Why is it necessary to involve a technical expert in construction disputes?
Most legal disputes also have a technical aspect—such as defective performance, deadlines, or costs. For the court or arbitration to be convinced, a well-structured, expert-supported position is much more persuasive. That’s why we regularly work with independent Hungarian and international construction experts.
7. What does developer's escrow management mean, and what legal problems can arise?
The purpose of developer’s escrow management is to ensure payment to subcontractors even if the main contractor becomes insolvent. In practice, however, the appointment of the escrow agent is often incomplete, formal, or disputed. Legal support helps ensure that the entitled party actually receives the fee due.
8. Do you also provide legal representation in English before arbitration courts?
Yes, we regularly represent clients in English-language construction arbitration cases, especially in international investments. Our team members are confident with multilingual documentation and international forums. This is particularly important when legal disputes arise with foreign partners, suppliers, or subcontractors.
9. What are the biggest risks if the construction contract is not properly prepared?
If the contract does not clearly specify the technical content, deadlines, payment terms, or sanctions, legal disputes are almost guaranteed. Many cases drag on for years, with significant costs and project delays. A well-structured contract provides not only protection but also transparent operation.
10. How does a lawyer with industry experience differ in construction law matters?
They not only know the regulations but also understand the practical workings of project management, execution, and construction industry decision-making. This allows legal advice to be based on real situations and to offer quick, effective solutions. Such expertise is often decisive for successful negotiations or litigation outcomes.
11. What is a TSZSZ lawsuit?
If the contractor or subcontractor’s performance is not certified and paid by the client or main contractor, they can turn to the Performance Certification Expert Body (TSZSZ) for an expert opinion. On this basis, a special lawsuit can be initiated, which has several advantages—for example, the court orders the defendant to deposit the full amount supported by the TSZSZ opinion at the beginning of the case, and the first-instance judgment is enforceable regardless of appeals.
12. What is developer's escrow management?
Developer’s escrow management, based on Government Decree 191/2009 (IX. 15.) on construction activities, is a financial security system designed to protect contractors from not being paid after completing their work. For large investments, using an escrow agent is mandatory, usually a financial institution or the State Treasury.
Our experienced team is at your disposal