10 key points of Egypt's new ‘Old Rent Law' amendments

Egypt Independent

3 days ago

Egypt's House of Representatives, during its general session on Wednesday chaired by Counselor Hanafi al-Gebaly, approved the government's draft law concerning certain provisions related to rental laws.
This legislation aims to restructure the relationship between landlords and tenants under the 'Old Rent Law,' marking a new legislative step towards regulating the real estate market and achieving balance between parties within rental agreements.
Here are the key points of the 'Old Rent Law' amendments:
Categories Covered by the Law
The law's provisions apply to properties leased for residential purposes, as well as those leased to natural persons for non-residential purposes. Crucially, these properties must be subject to the provisions of Laws #49 of 1977 and #136 of 1981, which have historically governed landlord-tenant relations for decades.
Transition Periods Before Contract Termination
The law specifies transitional periods before rental contracts are terminated. Residential leases will end seven years after the law comes into effect, while non-residential leases will terminate after five years.
This is unless both parties agree to end the contract earlier, providing tenants with sufficient time to make alternative arrangements.
Field Committees for Area and Unit Classification
Each governorate will form special committees, by a decision from the governor, tasked with classifying areas containing units subject to the law's provisions into three categories: premium, medium, and economic.
This classification will be based on a set of criteria including geographic location, building quality, service levels, and available infrastructure.
These committees are mandated to complete their work within three months of the law's implementation, with the possibility of extension by a decision from the Prime Minister.
Rent Increases Based on Area Classification
Effective from the rent due date immediately following the law's implementation, rental values for residential units will be adjusted. In premium areas, the rent will become 20 times the current value, with a minimum of LE 1,000. For medium and economic areas, the increase will be 10 times the current value, with minimums of LE 400 and LE 250 respectively.
While the classification committees complete their work, tenants will temporarily pay LE 250 per month, with any difference in value to be paid in subsequent installments once the committee results are announced.
Rent Adjustment for Non-Residential Units
For units leased for commercial or non-residential purposes, the rental value will be increased to five times the current price, starting from the month following the law's application. This is part of a phased plan to re-evaluate the rental market.
Regular Annual Rent Increase
The law stipulates an annual rent increase of 15 percent on a periodic basis for both residential and non-residential units. This ensures that market rental values are continuously and consistently updated without imposing sudden burdens on either landlords or tenants.
Mandatory Eviction Cases Under New Regulations
The law outlines two specific scenarios where a tenant is obligated to vacate the unit before the legal term ends: The first is if the unit is proven to have been closed for more than one year without justification. The second is if the tenant owns another usable unit for the same purpose.
If a tenant refuses to vacate, the owner can petition the Provisional Affairs Judge for an eviction order. This does not, however, preclude the tenant's right to appeal through a substantive lawsuit.
Tenant's Right to a State-Provided Alternative Unit
The amendments to the Old Rent Law grant tenants the right to apply for an alternative unit from the state, either through rental or ownership schemes.
This is contingent on applying before the specified period in Article Two expires and submitting a declaration to vacate the old unit immediately upon allocation. Priority will be given to vulnerable groups, such as the original tenant, their spouse, and parents.
The state is also committed to making these units available in official announcements and will regulate selection procedures in cases of high demand, based on criteria including the nature of the area.
Comprehensive Repeal of Old Rental Laws After Seven Years
After seven years from the commencement of these new amendments, the old laws that governed landlord-tenant relations, including Laws #49 of 1977, #36 of 1981, and Law #6 of 1997, will be completely repealed.
This marks the beginning of a new phase of legislative regulation in the rental market.
Law's Effective Date After Official Publication
The provisions of this law will come into effect immediately upon its publication in the Official Gazette. All its articles will then be enforced starting the day following publication, initiating a transitional phase that includes re-evaluation and the gradual implementation of the new procedures.