Every so often, conversations around Egypt’s Old Rent Law and the termination of the relationship between owners and tenants flares up again in official circles.
There are millions of units across the country of various types — closed, residential, administrative, and commercial — that fall under the umbrella of this law and are subject to its restrictions.
Additionally, successive Egyptian governments have also stumbled over the past years in ending and resolving the phenomenon of rent control and redrawing the parameters of the relationship between owners and tenants.
During a meeting in which the matter was discussed, Prime Minister Mostafa Madbouly said, “this issue is one that many governments have inherited and is quite controversial, and it is necessary to deal with it and reach radical solutions that restore the balance between the two parties.”
The draft amendment of the old rent law for non-residential properties tops the agenda of the plenary sessions of Egypt’s House of Representatives. The draft amendment aims to maintain the economic and social stability of Egyptian society by regulating the implementation of the ruling of the Supreme Constitutional Court (SCC), which allows for the eviction of tenants that use residential properties for other purposes.
Accordingly, this is done in a manner that addresses economic and social necessities represented in the lack of the current ability of tenants to find alternatives to places they rent in light of the current economic crisis brought about by the coronavirus pandemic.
The draft amendment of the law aims to give all parties concerned a period not exceeding five years from the date of its passing to reconcile their affairs, after which the relationship between the owners and tenants will be liberalised.
Moreover, the draft law also aims to achieve a temporary balance between the two sides of the rental relationship by setting a rental value five times the legal value in force and annually/periodically increasing the last legal value due according to this law by 15% during the following four years.
This is in addition to organising judicial and legal procedures to vacate rented premises on the day following the expiry of the maximum period specified in the law (five years) in case the tenant refrains from doing so.
Madbouly highlighted that there has been coordination with parliament and that several meetings and sessions have been held that take into account the social segments most in need of this law and allow a transitional period to reconcile the situation of the two parties.
At the same time, the House of Representatives is planning to hold several coordination sessions to reach an appropriate and fair legislative proposal in which there is no bias for one party over the other.
In a press conference at the Cabinet’s new headquarters in the New Administrative Capital (NAC), the PM said that many tenants of rent-controlled properties would be unable to afford to live somewhere else.
Therefore, the issue is being addressed wisely through community-based discussion to establish constants and a sufficient transition period, with the possibility of programmes being developed for those unable to find alternative housing.
Madbouly stressed that in the event of the draft amendment being passed, a fund will be established to bear part of the cost of the real rent value or an alternative unit.
He noted that more than 3 million properties in Egypt are subject to this law, which is a large number, stressing the existence of blatant cases of existing injustice, and the goal is to achieve a fair balance and take into account the social dimension.
Ahmed Ramzy, a member of the House of Representatives said that there is a serious desire from the parliament’s Housing Committee to amend the Old Rent Law during the current session of the House to strike a balance in the relationship between owners and tenants.
Ramzy pointed out that the government’s vision regarding rent control and the development of programmes to support unable groups reflect the state’s will to solve this inherited crisis and mitigate the impact of the damage that could be inflicted on renting families so that their lives remain stable.
This also confirms the Egyptian government’s keenness to reduce any threat facing tenants and create a balance by securing the rights and benefits of property owners. This is important as the meagre sums they receive under the current law cannot contribute effectively to alleviating the current era’s burdens.
He added that the passing of the amendment eliminates the phenomenon of closed apartments, which amounts to more than 2 million apartments nationwide, according to the latest statistics.
Head of the Local Administration Committee at the House of Representatives Ahmed Al-Sigini said that the PM’s statements regarding the Old Rent Law confirm the state’s will to solve the crisis.
Al-Sigini added that there are broad lines for a solution, the most important of which is respecting the rulings of the SCC — whether against owners or tenants — noting that the legal body will not approve an amendment that contains any faults.
Both landlords and tenants are victims of the current Old Rent Law, and efforts are being intensified to solve various problems related to the matter in a way that guarantees the rights of all parties, he disclosed.
Al-Sigini noted that the government is not looking for the displacement of citizens.
For his part, Amr Hegazy, the Vice President of the Afflicted Association of the Old Rent Law, said that the total units that fall within the law amount to 3.2 million housing units, including 1.3 million closed units.
Moreover, inhabited units amount to 1.6 million, and the estimated number of citizen beneficiaries of these closed and open units is 6.1 million, while nearly 3 million units need to be restored or demolished, as some of these properties are 90 to 100 years old.
