Egypt: Justice for landlords?

Gamal Essam El-Din , Tuesday 31 Aug 2021

MPs call for a public dialogue on the law regulating rents

Justice for landlords?
Justice for landlords?

MPs from parliament’s Housing Committee said this week that they plan to open a public dialogue over the law regulating landlord-tenant relationships. The call comes following remarks by President Abdel-Fattah Al-Sisi suggesting the unfreezing of old rents.

Ihab Mansour, deputy chairman of the committee, said that in the last five years more than 10 MPs drafted amendments attempted to unfreeze old rents, all of which “went nowhere because there was no response from the government”.

“Now following President Al-Sisi’s remarks, the committee should move to change the old rent law on residential and commercial properties,” though first, said Mansour, a dialogue should be opened canvassing the views of landlords and tenants.

Mansour revealed that the committee had already discussed a government-drafted law on regulating the old rents of non-housing units but the law stalled when the government failed to provide the House with figures on the number of commercial units involved.

In an open discussion with members of the Egyptian Family initiative on 14 August, President Al-Sisi touched on a range of economic and social issues, including the old rent law. He argued there must be a balance between the needs of owners and tenants. “The rent of some housing units in downtown Cairo is just LE20 a month though their market value can exceed LE5 million. This is completely unfair for landlords,” said Al-Sisi.

Landlords have long demanded that the 1964 law regulating the relationship between tenants and landlords should be amended to unfreeze rents. In 1996 the law was changed, but the liberalisation of rents only applied to new properties.

MP Ahmed Abdel-Sallam Qora says he submitted an amendment last year which would have set a minimum rent of LE200 a month, to be increased by 10 per cent annually, and stipulated that tenants who own a housing unit should leave their rented property.

Housing Committee head Amin Masoud believes the minimum rent should be increased to LE1,000, but annual increases restricted to five per cent.

Moetaz Mahmoud, head of the Industrial Committee, would prefer the law to allow tenants to buy their housing units at a discount of 40 per cent on the market value. “Another option,” he says, “is for landlords to pay 40 per cent of the property’s market value to the tenant, and then regain possession. In the case of any dispute over valuations, the property could be put up for sale, with the proceeds being split 60:40 between landlord and tenant.”

Suleiman Wahdan, the parliamentary spokesperson of the Wafd Party, drafted a law that gives tenants a grace period of five years during which rents will increase by 25 per cent a year.

Alaa Wali, a former chair of the Housing Committee, told Al-Ahram Weekly “in the past it has proved difficult to change this law without the government amending it itself or giving prior consent to amendments drafted by MPs.”

The need to change the law, adds Qora, was lent grater urgency after the Supreme Constitutional Court (SCC) ruled in 2019 that Article 18 of the current law (Law 136/1981) is unconstitutional. “The article states that landlords cannot ask tenants to leave the housing unit even after the rent contract has expired, a provision that the SCC judged a violation of the personal rights enshrined by Article 54 of the National Charter.”
Abdel-Moneim Al-Oleimi, a housing expert and former MP, told the Weekly that “laws regulating the landlord-tenant relationship in Egypt have done a gross injustice to landlords since the mid-1960s.”

“The result of the outmoded law still being applied means that some tenants housing units in upscale Cairo districts like Garden City and Heliopolis pay just LE5 in rent per month.”

“It is high time that the law be amended,” he argues, “and a balance is struck between the rights of landlords and tenants. The ruling issued by the Supreme Court in 2019 should ring alarm bells and send a message that perpetual rent contracts are unconstitutional and must be changed to address the injustices done to landlords who have long suffered the effects of rents being frozen.”


*A version of this article appears in print in the 2 September, 2021 edition of Al-Ahram Weekly


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