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Wednesday, 21 August 2019

Building amnesty in question

A new law introducing an amnesty on building violations has been stirring up controversy in Egypt

Safeya Mounir , Friday 8 Feb 2019
A view of houses and farmland on an island on the River Nile in front of high-rise buildings in Cair
A view of houses and farmland on an island on the River Nile in front of high-rise buildings in Cairo (Reuters)
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Egypt’s parliament has approved in principle a new law introducing an amnesty on building violations and giving those convicted of them the opportunity to come to an agreement with the state.

The House of Representatives’ Housing Committee said the new law could address the problems of millions. The state also stands to benefit from lands seized in violation of construction law 119/2008.

The new law corrects building violation and puts an end to court battles over construction violations while also helping to bring in revenues to overcome problems created by building violations and maintain arable land.

However, Hussein Sabour, head of Al-Ahly for Real Estate Development, a private company, said the fines introduced by the new law were not big enough to deter people from committing building violations.

A minimum fine of LE50 and a maximum fine of LE2,000 per square metre is included in Article 5 of the new law covering violations, which also states that each governorate should form a committee made up of two representatives of the authorities concerned, two evaluators accredited by the Egyptian Financial Regulatory Authority, and a representative of the Ministry of Finance.

This committee will then be tasked with dividing the governorate into zones and pricing each according to the planning of the area and the availability of facilities. The committee will also set the price per square metre to be paid by violators, with fines payable in installments according to rules decided by the executive regulations of the law.

The law applies to buildings constructed on agricultural land on condition that the buildings are fully constructed, complete with infrastructure, inhabited, and erected on land that has lost its agricultural potential as a result. Baseline conditions will be based on aerial images taken in July 2017.

But Sabour said it was incomprehensible for a law issued in the 1950s to sentence an owner to jail for taking down payments from tenants while at the same time another introduced only moderate penalties for building-code violators.

“In the end it will be the buyer who will bear the cost of any fines,” he said.
The new law treats violations committed over the past 30 years, and penalties will apply to violations committed before the law was issued as well as future violations.

No amnesty will be available for dilapidated buildings, buildings constructed on state-owned land or land owned by the Ministry of Antiquities, or buildings constructed in areas not designated for urban planning.

The government said the new law had not been drafted to collect extra revenues, as any fines will be paid to the state treasury to be distributed to administrative bodies in the districts where the violations were committed for development projects.

Fifteen per cent of the fines will go to the Social Housing Fund and service projects, 30 per cent will go to infrastructure projects such as sewage and potable water, seven per cent will go for parking lots, 10 per cent will go to bodies in charge of handling construction violations and squatters, and three per cent will go to the construction committees in different governorates and employees in bodies handling violations.

Alaa Al-Wali, chair of the parliament’s Housing Committee, said the law had been drafted to right wrongs and to protect people’s assets. If someone buys a unit that has been built without a permit, no good end will be served by tearing it down, he said.

There are 2.8 million lawsuits on construction violations in the courts, and resolving them amicably would mean lifting a huge burden from judges’ shoulders. It would also add to the national housing stock, since the buildings would be preserved, Al-Wali said.
Buildings not in violation of the law would benefit because a portion of the revenues raised under the new law will be directed to infrastructure projects and social housing.

Ahmed Gamal Al-Zayat, a member of the Construction Committee at the Egyptian Businessmen’s Association, said the state expected to collect LE4 billion in fines.

The new law was an important step forward in the government’s endeavours to put an end to sporadic construction and shantytowns, he said.

*This article was first published in Al-Ahram Weekly under the title Building amnesty in question

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