Registering property in Egypt

[Rivermead Global Property]

Originally Posted by distant dreamer

Hi

It may be something to do with the development not being finished. We own in El Gouna and most of the properties are not registered and I was told this is because the entire development is not complete yet. However, some owners are currently in discussions with the developers and I believe things are starting to happen with regard to this.

Also, I think I'm right in saying, you must bear in mind that if the property is fully registered it can cause certain problems i.e. you can only own 2 properties, you can't resell for 5 years and I'm not sure if you can rent your property out. So the third option may be best for investors.

Regards

Penny

I believe the new property laws are changing this and if in a tourist area the 2 and 5 rule are not applicable, however i am no lawyer. I think most people go down the 3rd route anyway and as you know the government are trying to make changes to make all this more streamlined anyway.

[The Smart Money]

It seems my worries were founded.

I have just been sent this by a reliable and knowledgeable figure (I'll name no names) involved with Egyptian real estate and I quote:

"From what I understand, as the plots in Sahl Hasheesh are so incredibly expensive, the company behind the overall project, ERC, have given all developers buying there very long payment terms in order to buy it - the figure of 10 years coms to mind.

As the developers will not be the outright owner of the land until well after the projects are complete, they can't pass on full ownership to buyers at this stage.

This is my guess as to why the standard registration method is not available in Sahl. But it is only a guess".

ERC is the master developer (the owner of Sahl if you wish) the land which our projects sit on is bought by individual developers.

The Implications are very important, potentially, full ownership alongwith the freehold rights of our properties will not be handed over to us 'supposed' owners on completion if monies owed to ERC are still outstanding from the developer, ERC remain the true owners of the land and allthough I do not genuinelly think this would happen ERC could legally could claim back this land from the developer if they remained unpaid - very feasible.

My intention is not sound alarmist but to forewarn those like me, who have reserved on property in Sahl, we deserve to know all the facts and potential pitfalls before we sign, you are all aware that the agent acts on behalf of the developer, the solictor acts on our behalf, with good reason we should all take the advice from those with our best interests at heart and not rely on glossy promises.

I still believe Sahl Hasheesh will be an fantastic resort and hopefully the developers will resolve this issue with the necessary additions to our contracts.


You thoughts please?!

[Rivermead Global Property]

Very interesting and something i need to research further. I do know there were outstanding payments on The Pyramisa Hotel of 10% to ERC however i have had confirmation this has now been paid and therefore apartments can be registered.

As there are no other completed projects in Sahl it is difficult to see if this is going to be the case as no doubt the developers will pay the land owners out of the profits from the property sales. If this is the case then i would hope the land owners are paid once the develpments are sold and owners can therefore register their properties whichever way they like.

Anyone else?

[wemyss1960]

This was the feedback I received from Resort Alliance in March


The current situation is like this:

The whole area of SAHL HASHEESH is under the supervision of the Egyptian Resort Company (ERC) and the Tourism Development Authority (TDA), after Sahl Hasheesh area is completed you will be able to register your property with the land registrar. At the moment Signatures of both parties to the contract of sale can be authenticated before an Egyptian court.

[The Smart Money]

Originally Posted by wemyss1960

This was the feedback I received from Resort Alliance in March


The current situation is like this:

The whole area of SAHL HASHEESH is under the supervision of the Egyptian Resort Company (ERC) and the Tourism Development Authority (TDA), after Sahl Hasheesh area is completed you will be able to register your property with the land registrar IF all monies owed to ERC by the respective developer are fully paid, whose to say the developer wont simply walk away? after all he has his money from the buyers. At the moment Signatures of both parties to the contract of sale can be authenticated before an Egyptian court.

Surely the developers should confirm and have receipt of the fact all money or '2nd charges' on the land have been paid prior to buyers signing a contract claiming to show we have freehold rights on completion - when in reality this may not be the case

[The Smart Money]

Originally Posted by dave99

No confusion, it's a simple question about what is given to the buyers, and has it happened yet.

I think Dave has a point, can anybody else comment?

[rossantony]

There is so much confusion and mis-information about registration in Egypt I feel inclined to write a short reply........

I read this thread with interest. Deals between ERC and developers will always have slight variation, however only slight, as there is a modus operandi in purchasing plots on sahl. I have copies of two seperate purchase agreements between ERC and developers. In both cases all the monies have been paid in full prior to ERC giving the title to the land to the developer. Also the authority to build on the land, given by the TDA was only issued after ERC has issued a receipt of payment.

As somebody who has been involved in the purchase of a small villa plot of land on Sahl Hasheesh, I can tell you that I was never offered 10 years to pay back the money, and had to pay for everything up front!

For all large developments, and small villa lots that my company is selling I can prove full title, as full payment has been made to the ERC.

The developer will not receive the majority of his money until the owners have exchanged on their property. Exchange happens when the developer has finished the property, to the quality and finish as described in the contract, and also when both the clients lawyer, and the developers lawyer, register the property in either the local or national court.

All ways of registering property are available on Sahl Hasheesh, however one must always wait until the development that you are buying on is finished. I have clients buying on Veranda, for example, who will be registering their property fully in the highest court in Egypt. They will also be able to sell on their property before 5 years.

The Arabic laws in Egypt are very difficult to translate into English, and I am finding that UK lawyers are finding it very difficult to understand exactly what is the legal method to register property, and when title is passed onto the owner, and what is the owners legal position at any point during the buying process.

I suggest that clients interested in purchasing property within Egypt, register their property correctly. I have a lawyer that is proving extremely adept in helping my clients do this. He is reccommended by the British Embassy. He is Egyptian, and he has been working as a lawyer for over 30 years. He is used by developers, agents and clients, as he is highly skilled in the law.

kind regards

Ross

[queenie40something]

I have now merged these 2 threads together as they are both about the registration process.

[Leo en Manon]

Hello All

I am not sure this is the correct threat to post my question in and I am not sure this question already has been answered somewhere else on the forum but.. What about egyptian property tax after registration.. Is there a difference in the way you rigister your property. I heard that the egyptian government has changes their tax laws regaring property recently or is planning to.. This could be a rumour but is their anybody wih more info on this subject?

thanks in advance

Leo

[rossantony]

When you buy a property, a flat, villa, or a plot of land you are allowed to register two properties, with each properties total size being no more than 4000m2. The law states that you cannot sell your property within 5 years.

However you can also sell the property, flat, villa, or a plot of land before the five years, if you can get permission from the primary ministers in Egypt.

If you do not register the property, in the official registrar, you can buy as many as you like and sell at any time. You can go to the local court to confirm your contract between the first party (seller/owner) and yourself as the second party.

regards