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Legal perspective

Please contact us for more information regarding the property laws in South Sinai


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   The purchasing Process

Egypt is considered as one of the best and most beneficial places in the world for investing in real estate. Here you will find wonderful weather, marvelous historical places, a magic and colorful underwater world – together with well-constructed and beautiful buildings and cheap prices. There is a large variety of properties for sale around the Red Sea area, such as chalets, villas & apartments of which some can be moved into right away and some still under construction. The prices depend primarily on the location and the finishing of the properties. After you have found your dream home it is time to finish all the legalities.

Step 1: Investigation by the governmental authorities in order to find out:

  • Who is the real owner of the property?
  • Does the owner have a registration contract?
  • Are there any restrictions, mortgages or lines on the property?
  • Is the owner Egyptian or foreign?
  • Does the owner have building permission or not?

Step 2: Signing the contract:

After finishing the investigation the next step is to draw up a sales contract between the seller and the buyer, which will include some guarantees in the favor of the buyer.

Example: a guarantee from the seller not to challenge the buyer in his ownership and utilization of the sold unit. The sales contract will also include a clause, which considers the signature of the seller as the final receipt of receiving the total amount of money for the sold unit.

Step 3: Power of attorney:

Both the seller and the buyer must make a power of attorney with each their attorney in order for the seller to be able to sell the property and for the buyer in order to be able to buy. The attorney will then be allowed to sign on their behalf on the final contract in front of the notary public and make all the necessary steps regarding registration.

Step 4: Registrations:

The seller must sign a delivery record of the sold unit and notarize it in the notary public. The buyer will go to the notary public to begin the registration steps to register his new property.

Comment: Should there be a long period from signing the sales contract to making the power of attorney due to fact that the buyer has not settled the full amount yet the below steps are recommended in order to secure the buyer:

Example: This could be in a case where it takes more than 1 year to finish the deal due to the fact that the property is not finished yet. The normal procedure is to pay e.g. 50% of the full mount upon reservation and the rest after 1 year. The power of attorney will not be given until the full amount has been paid.

  • The buyer must lodge a verification signature case against the seller in order to obtain a judgment from the court stating that the signature of the seller on the sales contract is true and valid.
  • The buyer must always keep all the receipts from the seller for any installments paid to him.

Egyptian Law regarding foreigners' ownership

The Egyptian law related to foreigners buying properties in Egypt

Ministry of Justice Legalization & Registration Department The Head Office of the searching of law Decision no, (5) at 24/5/2005 ……from all the legalization offices and all branches in all Egypt .

After all the Decisions numbers (30) in the year 1996 and (37) at 8/10/1996 and (5) at 17/3/1997 and (1) at 24/2/1998 and (18) at 14/12/1998 and (19) at 14/12/1998 and (2) at 22/2/2005 to publish all the items of the law number (230) at the year 1996 to organize the ownership for the people being non Egyptians regarding the buildings and the empty grounds and after the Decision of the Minister of Justice in Egypt number (3338) at the year 1996 to organize the work in the non Egyptians ownership offices and the steps of make it.

After all that it done the Decision of the minister of Egypt number (548) at the year 2005 regarding the ownership for the non Egyptians and the using rights of the non Egyptian people to own units to stay in Egypt in some of the areas and after the issues of the explaining book for this Decision in the same date of this Decision and after it has become published in the Egyptian newspaper (El Waqaea el Misr) in the issue number (76) at 5/4/2005.

The Decisions

(First item)

All non Egyptians have the same rights as the original Egyptians after receiving the agreement from the government when wanting to have ownership of units and flats to live in, in the whole new building areas and the touristic areas as the following;

1.      The touristic area of (sidi abd Elrahman) under the Decision of the Minister of Tourism number (112) at the year 1980.

2.      The touristic area of (Hurghada) under the Decision of the Minister of Tourism number (113) at the year 1981.

3.      The touristic area of the (red sea under the Decision of the Minister of Tourism number (175) at the year 1982.

4.      The touristic area of (Ras al Hekma) under the Decision of the Minister of Tourism number (176) at the year 1983.

(Second item)

It is possible, but after the agreement of the government to give the non-Egyptians the (using right) to have some units or flats to stay maximum (99 year) in the touristic area of (Sharm el Sheikh).

(Third item)

All the non-Egyptians have ownership or using rights for the flats or the grounds or the buildings under this Decision of the Minister of Egypt.They have all the right to have act of (selling or renting) for these units or these buildings or these grounds, but after they have obtained ownership or using rights and its order for all the legalization offices and the registration offices in Egypt to record this act of in maximum (10) days after they have all the documents.

(Forth item)

This Decision must be published in the Egyptian newspaper (El Waqaea el Misria) and it is valid after the next day of the publication.

Building guarantee:

The building guarantee's provisions come on the Articles from 651 to 654 from the Egyptian Civil Code as follows:

Article 651:

The architect and the contractor shall jointly guarantee the buildings they construct or other fixed constructions established by them against whole or partial demolition even if it results from ground defect or the employer requested erecting defective construction, unless both contracting parties intention for such establishment is to remain for less than ten years.The guarantee prescribed in the preceding clause shall involve flaws existing in the building and establishments, resulting in posing a threat to the safety and solidity of the building.The ten years term shall begin from the time the work is received. This article shall not apply to the right to have recourse against the subcontractors.

Article 652:

If the architect is confined to setting the design without being assigned to task of supervising the execution of work, he shall be liable only for the flaws resulting from the design.

Article 653:

All condition meant to exempt or limit the exemption of the architect and the contractor from the guarantee shall be null and void.

Article 654:

The action of foregoing guarantee shall abate with the lapse of three years from the occurrence of demolition or the discovery of the flaw.

You can notice from the above articles the following:

1.     The building owner can't agree with the architect or with the contractor to exempt any of them from the building guarantee or limit it less than ten years, any agreement for exemption or limitation from the building guarantee shall be null and void.

2.     At the contrary any condition for increase the building guarantee more than ten years shall be true and valid.

3.     If the employer and the contractor, architect didn't agree about the building guarantee period, it shall be ten years according to the law.

4.     The building guarantee date starts from the moment the employer (The building owner) received the building.

5.     The question is: what is the situation if the building owner sell the building to several new owners,
The answer is: all the new owners have the right to use the first owner's right for lodging the building guarantee case against any of the contractor, architect or against the both. Or lodge a case against the previous owner directly then he will return later on the contractor, architect or to interfere them in the case.

6.     The question is: What is the situation if the previous owner agree with the contractor, architect on ten years, and the new owner buy the building or a part of it after five years and he want to agree with the new owner about ten years – or more – building guarantee.

     The answer is: the new period will be valid only against the new owner and valid against the architect, contractor only for the remaining five years according to the provision of the article No. 147/1 from the Egyptian civil code: A contract is the law of the contracting parties. It shall never be revoked or amended except by sheer consent of both parties or for reasons to be provided by the law.

 
   
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