Rent law under review

Gamal Essam El-Din , Thursday 17 Feb 2022

Attempts are underway to strike a balance between the interests of tenants and owners of residential and non-residential units

Rent law under  review
An amended legislation will allow for gradual increases in cheap old rents

A joint parliamentary-government committee has been formed to amend the landlord-tenant relationship law, says Ahmed Al-Sigini, chairman of the House of Representatives’ Local Administration Committee.

“A preliminary meeting including parliamentary and government representatives was held earlier this month to review the current law which dates from the 1960s,” revealed Al-Sigini.

The joint committee includes 10 members — six MPs/senators, and four government officials. In addition to Al-Sigini, the MPs are Ashraf Rashad of the majority Mostaqbal Watan Party; Ibrahim Al-Heneidi, chairman of the Legislative and Constitutional Affairs Committee; Emad Saad Hammouda, chairman of the Housing Committee; Khaled Mahmoud Said, chairman of the Senate’s Housing, Local Administration, and Transport Committee, and Abdallah Al-Assar, chairman of the Senate’s Legislative and Constitutional Affairs Committee. The government representatives are Minister of Justice Omar Marawan; Minister of Local Development Mahmoud Shaarawi; Minister of Housing Assem Al-Gazzar; and chairman of the Cabinet’s Council of Advisors Sherif Al-Shazli.

According to Al-Sigini, the committee’s goal is to strike a balance between tenants’ and landlords’ interests.

“In changing the old housing rents law, the committee will observe the rulings and principles issued by the Supreme Constitutional Court in this respect. One of those rulings is that rent contracts cannot be perpetual and must change every now and then to reflect inflation.”

Al-Sigini also said committee members agreed that any change to the law could not be dramatic. “Any changes should be gradual, avoiding dramatic hikes that could stir social unrest and which would prove difficult for large numbers of families.”

Committee members have also proposed that when the law is changed the government should make subsidised housing apartments available for sale.

“Newly married couples and young people who live in old rent housing units and who might decide to leave these units once the new law is passed could find the subsidised apartments a more affordable alternative,” said Al-Sigini.

The 10-member joint committee will meet next Saturday at the headquarters of the Justice Ministry to start drafting the new law.

Following a cabinet meeting on 10 February, Prime Minister Mustafa Madbouli said the government was currently engaged in seeking solutions to the many problems it had inherited, with the infringements on agricultural land, and the old housing rent law, at the top of the list.

He added that the government was coordinating with the House of Representatives and the Senate in a bid to draft a new law to secure a balanced relationship between tenants and landlords. The amended legislation will allow for gradual increases in rents.

Al-Sigini said tenants could feel assured that they will not be evicted from their homes, and that landlords will be reassured that they will be receiving fair returns for their property.

Cabinet Spokesperson Nader Saad said in a TV interview on 12 February that even if the new law led to some tenants being evicted, they would not be left homeless. “The joint committee agreed with Prime Minister Mustafa Madbouli that the government will provide evicted tenants with alternative housing units at subsidised prices,” said Saad.

The government is gathering information on old rents of both residential and non-residential units.

“I want to make it clear that we are working on two fronts — the rents of residential and non-residential units — but there will be a transitional period for each law before it goes into effect,” said Saad.

He added that for residential units the transitional period could extend to two years, but for non-residential it will likely be shorter.

Bahaaeddin Abu Shoka, Wafd Party chairman, said the old rent law was not being changed solely in response to complaints voiced by landlords. “The Supreme Constitutional Court has issued two rulings on the subject. The first states that the perpetuation of rent contracts is unconstitutional; the second that only first degree relatives of deceased tenants can inherit the contracts of old rent units, and that the contract expires when the first degree relative dies,” said Abu Shoka.

The current law strips landlords of any meaningful power to raise rents or evict tenants, leading to situations where apartments worth millions of Egyptian pounds on the open market make next to nothing for their owners.

“Luxurious flats in high-class districts in Cairo like Garden City and Zamalek and worth millions of Egyptian pounds are rented for prices as low as LE5 to LE20 per month,” said Abu Shoka.

“If passed, the new law will give landlords an opening to evict old renters, whether they are individuals, government agencies, embassies, clubs, companies, or other entities.”

*A version of this article appears in print in the 17 February, 2022 edition of Al-Ahram Weekly.

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