Company profile

At the end of 2009, new regulations entered into effect for construction activities and the provision of banking services. One of the key elements of the legislative changes was the trusteeship institution meant to prevent circular debts that are widely common at construction projects through the creation of a so-called “Treuhand” that has long been in use in Western Europe.

To that end, our company was founded by professionals who have decades of professional experience in the legal issues of the construction industry and the financial sector. Our activities are carried out subject to a permit issued by the Central Bank of Hungary.

In accordance with the above legislation, Első Fedezetkezelő Zrt. ensures as a depositary part that the constructors involved in the construction activity are duly paid their fees as a function of their actual work performed. The legislative background allows this such that for construction projects beyond a certain value limit it requires the involvement of a trustee in the construction activity.

During such activities the financial collateral appropriate for the construction phase commenced must previously be deposited with the trustee, which disburses the contract fees subject to a certificate of the technical supervisor to the prime contractor and the subcontractors involved in the particular phase as registered in the electronic subcontractor registry maintained by the trustee. In the event of any dispute concerning the performance, the disputed sum is retained in the deposit until the issue is resolved in an out-of-court manner or through litigation.

In case of projects involving the budget or European Union grants, construction trusteeship activities may only be fulfilled by the Hungarian State Treasury, whereas for other projects exceeding the EU limit (app. HUF 1.5 billion) it can also be performed by financial service providers authorized to administer bank accounts (credit institutes or financial institutes).

Our company, current the only one in Hungary, offers its services to clients as a financial institute with a license issued by the Central Bank of Hungary.

Our main services are the following:

- Our company administers a trusteeship account and informs both the client and the prime contractor of the changes in the level of the collateral. We disburse the fees confirmed in the report and certificate of performance issued by the independent technical supervisor or, in the event of any disputed performance, such fees are withheld.

- We manage the performance deposit offered by the prime contractor.

- We maintain an electronic subcontractor registry.