Hi everyone. I recently joined this forum in order to ensure I'm aware of all the known pitfalls when buying in Egypt. I recently put a £2k deposit down on one of the Hurghada Village Apartments. These are currently selling for around £30k for a one bed with large roof terrace and on the face of it looks like a good investment with guaranteed 7% annual rental return on the first 2 years.
I subsequently stumbled across your forum thread which brought to my attention the whole property registration issue and the 5 year no resale rule when the property is formally registered with the Egyptian authorities.
I subsequently went back to the agent who appeared to know nothing about the registration issue, but took around 2 or 3 weeks to get the following reply from their lawyers (see below).
The main problem I have with all this is that some agents are either unaware of the legal registration issue and the associated 5 year rule, or are simply not telling their clients about it. Indeed re the 3 or 4 agents we spoke to prior to putting down a deposit, all of them were selling the benefits of being able to 'spin' these offplan investments - i.e. making a quick profit by onselling them either before or shortly after completion.
At the present time we don't know how long we will hold on the apartment, but it would be good to know we had the option of selling within 5 years if we needed to - e.g. ill health, other investment opps etc.. On the other hand we, like everyone else, wants to know their investment is reasonably safe and legally made.
So the questions I'm now left with are:
1. The agent is now appearing to offer the purchaser (me) the option of either formally registering the property or not - with an apparent default on the no registration route.
2. If I go along with this second option of NOT formally registering the property in order to reserve the right to be able to resell at will - what additional risks am I exposed to? (if any). This advice appears to conflict with Peter's article "Positive Property Investment Forecast for 2007" on purchasing a property where he advises: "Even though many Egyptian properties are unregistered, registration is an essential pre-requisite to a purchase".
3. What are other investors doing, and is this a safe investment for me?
Given the elapsed time since putting the deposit down and getting to this stage, I now need to make a decision to proceed within the next few days, therefore all advice and knowledge gratefully received.
Regards to all,
Lindsay.
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31 August 2007 - reply from our agent re my question on the 5 year issue:
Please find attached the information you have been waiting for regarding property registration of the Hurghada Village Apartments.
I am sorry that you have had to wait for this information.
If you have any further questions please do not hesitate to contact me.
Kind regards
PROPERTY REGISTRATION IN EGYPT
There are two types of registration for properties in Egypt, the most formal of which restricts sale and rental in the first 5 years and is rarely used by foreign purchasers. The second of these is used by investors for the flexibility to determine where and when they rent and sell their property.
We therefore will register all properties using the second method unless requested otherwise.
Regarding residency, purchasing a property in Egypt automatically gives the purchaser the right to apply for residency.
Our lawyer who has carried out the due diligence for the development has many years experience in dealing with properties in Egypt and has successfully completed many purchases without complications.
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