Do i definately need a uk lawyer when buying in Egypt

[Bluenitsuj]

I am looking at a studio in Hurghada, everything is done through the property company ie purchase costs, lawyer costs etc

Below is an answer to me from my agent about my question about Lawyers, is this right?What has anyone else done.

"I will be honest with you on the lawyer front and it will be your choice of course. Only an Egyptian lawyer can sign for the title deeds on completion, you can contact a UK lawyer who will in turn use a local Egyptian lawyer.

The process is the same and often you are wasting money and the only reason to use a UK lawyer is peace of mind but will cost £1000+.The contracts is Egypt are very different from the UK. It is merely a reservation contract (sale agreement ) to confirm the price and type of the unit and the completion date etc.The sales contracts in Egypt are called "Green Stamps" contracts.

The £795.00 closing cost is made up of £500 for the property registration, ie to tie your name up with the notary. Then on completion you have £295 which is the lawyers fee in Egypt. On completion the Egyptian lawyer will go to the notary office with the Uk developer and sign over the titel deeds to your name."

Please can u put my mind at rest and tell me this sounds ok.

 

[DC]

go to Chambers and Partners : Home, it has all the best lawyers around the world, english, egyptians etc, start there.

 

[dave99]

Opinion on the use of Egyptian lawyers

Hi

As a developer, owner and agent I've been involved in some of the issues and concerns. The statement that you have given sounds about right to me however the total costs seems much higher than my lawyers has quoted for registration of apartments sold by me, and this is not a discount scheme. The truth seems to be that we Brits are an easy target and generally are made to pay through the nose for most things if we do not have "inside" knowledge.
The use of an Egyptian lawyer technically is not needed however the system is in a foreign country, in a foreign lanuage, and is very time consuming, etc. The normal process is that you have to create a Power of Attorney for your Egyptian lawyer who will complete the task on your behalf whilst you are back in the UK, unless you stay in Egypt for several months that is.

The most important part of the process is to get the contract in English, to understand and accept the Ts & Cs, and to get a copy of the original land registration from the person selling you the property, which an Egyptian lawyer can thenl use to verify the registration BEFORE you agree to buy.
A UK lawyer is not going to add much value but will add substantially to the cost.
It's all about knowing who you can trust. We Brits like to think that we can "trust" a lawyer to act soley for us, and in the UK they charge enough to make that work most of the time. In Egypt the work gets done by devious means and the cost could be different every day.

If you're spending £100K on something maybe £1000 in fees is OK, if your're only spending £25K then its far too much.

 

[Bluenitsuj]

Thanks for reply, the Off plan apartment I am looking at is £15,000, due to be completed in Summer 2009. A deposit 10% is due now, at what point should I get a uk lawyer involved, or should I stick to what my agent has suggested. Also,do I not need to sign anything myself, it says my developer and the Egyptian Lawyer will sign the deeds over to me. Would this suffice and give me peace of mind.Any information you can give will be very welcome.

 

[dave99]

Proceed or not

Hi

I would be VERY wary of anyone selling you an apartment where they take money BEFORE you get a contract, and I would suggest that you do not progress without a contract that all interested parties have signed.

It is normal to have to pay a reservation fee, without a contract, which should be refundable for the most part, followed by a deposit once you have read and approved and signed the contract.
A £1000, deposit on £15,000 apartment is OK, but NOT until you have a signed contract.
It is true that you do not have to do anything for registration yourself, if you give authority to another person, but even that sounds a bit suspect at this stage.
YOU MUST get a copy of the Land registration and confirm that it is in the name of the person that you are buying from. Without a contract you have no idea who you are buying from.
Questions:
Is this a UK agent selling for a Egyptian property owner.
Are you paying the £1000 to UK agent or the owner
Have you seen the location in Egypt yourself
Have you been given a full detailed plan of your apartment
Do you have a list of what is included in the apartment
Do you have a web-site link showing the development / advert.

 

[Bluenitsuj]

The Uk company is Knightknox the £1500 deposit would be paid to this agent. I have not sen the location myself, as I have no interest in ever staying there, this is pure investment. I have seen a full detailed plan and a list of what is included. The development is called Pyramids 2 red sea resort.

 

[dave99]

Good investment or not

Hi

Just had a look at the web-site. This is being sold by many agents and this is on one of them.
"The developer has full legal title to the land, and all the necessary licenses and planning permissions have been obtained, and are available on request, with a 10 years builders warranty. ".
I strongly urge you to take up this offer BEFORE going any further.
Buying from adverts like this will cause you some concern in the future UNLESS you sell BEFORE they apartments are finished (fat chance of that I think).
There are lots of better located apartments in Hurghada for rentals, and investment. This studio is VERY small (27 to 30 sqm) compared to others. The whole complex, if ever completed, looks great but it is not in a good location, and will take much longer than Summer 2009 to complete I think.
Even the agents cannot decide where it is if you read the different adverts.
The UK agent looks OK, and therefore I am surprsed that you have not already been given everything, UNLESS this £1500 is a non-refunable reservation fee, in which case this is far higher than most agents need, especially since it is 10% of the total price.
I only ask for £100 to reserve for 4 weeks, then ask for £1000 more as a deposit AFTER sending out a sample contract, then we start a payment plan over an agreed timescale.

The £500 pa fee is a bit expensive.
There is NO air con included, ESSENTIAL in Egypt, this will cost at least another £500.
The rental market for this location / size of apartment does not exist yet, so this will be a big gamble. There is also no real resale market either in this location UNLESS you can get a buyback from the developer (not much hope of that).
I see that one agent for this resort advertising what we call "flipping" which means that you sell BEFORE you even complete your purchase and make profit, sounds great and in principle, but it only works where demand is far higher that supply - this will NOT apply here - there will be many more new apartments to buy direct from the developer that will have substantial marketing behind them so why would anyone buy yours (or all the others that are being sold like yours) !!!

 

[dave99]

Opinion

Not a big cost if there is no capital vlaue increase but the costs will eat up all of the increase for the first 3 or 4 years I think and without personal use and doubtful rentals it's maybe not a good investment.

 

[Peter Mitry]

Having read all of your posts with reference to other Developers I wonder why anyone would ever consider buying anything in Egypt - they are so negative! I hope for your sake this does not rub off on your project......!!

 

[Lynne]

Reliable Lawyer in Hurghada

I have just successfully purchased a property in Hurghada and as it was bought from an Egyptian friend and not from a property developer I had to find a local lawyer.

Peter kindly gave me the contact details of Hamdi El Sawy, an Egyptian lawyer who lives and works here. Hamdi found a lawyer for me in Hurghada and I found him to be trustworthy, kind and helpful. His English is not bad at all and he charged me 2500 Egyptian pounds for his fees. (An extra 1000 will have to be paid for registration but that does not go to him)

I am pleased to give his details here. His name is Hany Magdy Mahmoud, 31 El Nasr St, El Dahar. Office number 0020653552432. Mobile 0020101038211

best regards
Lynne

 

[Alang]

own lawyer or their lawyer?

Hi all,
I am thinking of buying an apartment in Hurghada, I have looked all over the web these last couple of months, read lot's of posts in this forum and read the propertastics 'book' on hurghada (very good).

My question as a newbie to buying property abroad is do I use the developers lawyers which are probably a bit cheaper (not too important that).

Or do I use a lawyer of my own.
One who is conversant in Egyptian law and English speaking.
If it is better to us my own lawyer how do i find a good one?

any help much appreciated .
Alan

 

[Peter Mitry]

Its very much your choice Alan; the big Developers like Resort Alliance (Sahl Hasheesh) have their own contracts in English and in Arabic and you do not need your own lawyer. However, many clients like to appoint their own just for the peace of mind of knowing that everything is in order.

 

[awahee123]

Hi Alang,

If you are really wanting to employ a lawyer then you should in my opinion Employ your own lawyer,However saying this I have also purchased an apartment in Hurghada and was happy to use the services of the developers lawyers.
Do you have an issue of trust with the developer?.. If not then use the developers legal team.Just remember any thing you want to put into the contract will automatically be translated from Arabic to English with most developers.

 

[SHO]

I would always recommend using your own lawyer. Although the terms of the contracts might be OK... developers contracts are very much 1 sided! It is YOUR lawyers job to make them fairer.

 

[dave99]

Good question

I would always recommend using your own lawyer. Although the terms of the contracts might be OK... developers contracts are very much 1 sided! It is YOUR lawyers job to make them fairer.

Good question.

Why does anyone need a contract anyway !

The sheer fact that we EXPECT a contract means that there is already a lack of trust between the two partries. The point is really just how much do we trust each other. For this type of contract there has to be doubt on both sides since there is no personal background on which to develop any trust.
The actual words in any contract have to be fair to both parties.
If you are competent to read English (note ALL contracts are in English, or dual language not just with big developers),YOU can decide if you need a lawyer to change the terms.

Any sensible developer will change a contract to suit a buyer if there is sufficient incentive so to do. The bigger developers have lots of reason NOT to do this, even if you use a lawyer.

The most important reason to use a lawyer is to prove that what you think you are buying is actually owned buy the other party to the contract, and that there is a reasonable belief that your property will be delivered, as specified. This is where a lawyer acting soley for you is most appropriate if the information is difficult to find, or you have some doubts. If the information has already been freely given by the developer (deeds to the land, building license etc),then you are simply spending money to give yourself "piece of mind", and we all need that when spending lots of money.

Another option that my owner are using is to find ONE lawyer that all owners use (not linked to the developer),this should make everything very simple and inexpensive. NO brainer really - but the developer has to co-operate and give you at least ONE other owners name. We have an Owners Club already so everyone knows each other and have chosen to co-operate, and even give help to potential new owners.

..


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[SHO]

Checking up on Land title, licences, debts, previous owners I believe is the easy part! The difficult part is when the developer doesnt keep to his side of the agreement... Thats what you really need the contract for...and normally they have a few get out clauses, penalties for buyers etc etc!

 

[DC]

USE YOUR OWN LAWYER - ALWAYS.

IF YOU WANT SOMEONE IN EGYPT TRY THIS LINK Chambers and Partners : Home THEY HAVE LAWYERS GLOBALLY, IS FREE AND IMPARTIAL.

 

[mtdd]

I have lived in Egypt for 16 years, and believe me - you need to use a lawyer. Your own lawyer. And then hire another lawyer to watch out that your first lawyer doesn't roll you into the gutter!

 

[Peter Mitry]

Again, excellent advice. One will probably do, just make sure you get the RIGHT one....

 

[SHO]

Boy is that true!!!

I have lived in Egypt for 16 years, and believe me - you need to use a lawyer. Your own lawyer. And then hire another lawyer to watch out that your first lawyer doesn't roll you into the gutter!