Legal System of Purchasing Property In Egypt – An Overview
Egypt has recently experienced a substantial growth in its Real Estate industry. Partly out of need to house its local work-force and its business sector, but it has mainly been stimulated by a relatively strong demand by foreign nationals and expatriates.
This is a guide, a brief overview of Real Estate regulations and purchase and transfer of ownership under Egyptian Law.
The transfer of title of real estate in Egypt is completed as :-
a) the acceptance of a private sale and purchase agreement between the seller and buyer
b) the registration of title of the purchaser with the Real Estate Department and Notary Public situated in the district of the property.
Law 230 of 1996 (the Foreign Ownership Law) allows foreign nationals the same rights and procedures without prejudice as Egyptian Nationals but stipulates foreign nationals can only purchase two properties not exceeding 4000 sq.mts. each. Properties for sale should be registered at its relevant authority.
Buyers must check this status and view its original title documentation to ensure a safe and legal transaction. Check there are no third party mortgages, pledges or covenants recorded on the property affecting the transfer. This can be undertaken at the Official Pledge Register at the Notary Public of that district.
Under Egypt Law, real estate taxes are levied on properties and not the owners. The rate of tax will differ as to its location, grade of building and standard. Purchasers must instruct their attorneys to check the status of the said tax.
Under Egyptian Law, property buyers and sellers are required to draft a comprehensive Sale and Purchase Agreement before transfer of title. This is often an Arabic document. To ensure it includes all representation, guarantees and protection, a bi-lingual copy produced by an experienced contractual lawyer would be advised.
Registration of Purchaser's Title is a procedure to safeguard buyers from the claims of third parties and governmental authorities. This takes two courses of action.
1) Registration of the property through the Real Estate Department and Notary Public.
2) Registration of the property through the Courts.
In most registrations, completion takes around three to six months depending on the completeness of the property and/or documentation and purchasers must take into account a three per cent registration fee is chargeable on the stipulated price of the property.
The Court ruling confirms the validity of the sale of the property, claiming the purchaser as the legitimate owner of the property. This may take up to six months and primarily used to register properties in New Urban communities and Sinai.
