Registering property in Egypt

[jenniann]

Hi,

I was wondering if anyone could shed any light on the costs and implications of registering / not registering an off plan property on completion? I am aware that there is a 3% fee along with some small survey fees but how do we go about this? Presumably, we also need someone to confirm that there are no charges outstanding against the property from the developers finance - is this something a lawyer should do automatically? I've also seen comment that you are not permitted to sell the property for 5 years if you register, is this true?

Any information greatly appreciated.

Many thanks.

 

[alison9071]

hi jennian
it is not to difficult to register your property in egypt but you do need to be sure that you have all the relevant information i am working on putting a document together at the moment an easy step by step guide i am doing this withan international lawer based in the uk and with an egyptian lawer please send me your email and when it is ready i will gladly send you a copy but who ever you are buying from should know the basics regards selling your property after 5 years this depends on how you register it so not neccessarly so but i will be in touch thank you alison

 

[alison9071]

There are essentially 2 systems of registration in Egypt, one is formal but has clear disadvantages as you have indicated in that you are not allowed to sell the property for a period of 5 years without the permission of the Prime Minister and also you are not allowed to own more than 2 properties. The fees are a little hazy because there are "extra" payments that are made in order to expedite the procedures without which the procedure can take twice as long from around 4 months to 8 months. Alternatively, there is also a system of registration at court which is a lot cheaper and quicker and by this method you can own as many properties as you like and sell when you like. If the Egyptian Government wish to steer overseas investors into registering their property with their Land Registry then they must review the current restrictions, procedures and costs for doing so. You will undoubtedly need proper legal advice and representation to ensure it is all done properly. We know a UK lawyer who can help you if you wish as he acted for several buyers in Egypt.

 

[jenniann]

Hi Alison,

Thank you very much for that. I did try to send you a private message with my email address but if it didn't reach you please let me know. It would be very helpful if you could let me know the name of the lawyer as I'm in the process of getting some quotations and a recommendation would be a great start.

Many thanks,

Jen

 

[Peter Mitry]

Property Registration

Alison's comments are spot on. I work with Resort Alliance, the promoters of Sahl Hasheesh. Here the Developers have a master plan showing proof of ownership of the entire 32 million m2; each plot has been mapped and given a number and each Developer purchasing land has to submit a project for approval, first to the Egyptian Resort Company who own the land and subsequently to the local authority for planning approval.

Once this is granted there is a system of inspection and a final check that everything has been built according to plan. At this point the Developer will go with the purchaser to the Notary in Hurghada and register the purchase. The cost of this is around 350 GBP.

This is a workaround as Egypt does not have a formal land registry system at the moment.

 

[gip]

property registration in Egypt

hi jennian
This the marketing director of Global investment Properties 4U,
we are based in both UK and Egypt.
I manage our office in the Red sea.
Just wanted to ask you, which city are you buying your property in?
As according to the prim minster resolution the process of legally securing your rights in the newly bought property will differ from a city to another.

 

[Zeiad Yehia]

Hi,

I was wondering if anyone could shed any light on the costs and implications of registering / not registering an off plan property on completion? I am aware that there is a 3% fee along with some small survey fees but how do we go about this? Presumably, we also need someone to confirm that there are no charges outstanding against the property from the developers finance - is this something a lawyer should do automatically? I've also seen comment that you are not permitted to sell the property for 5 years if you register, is this true?

Any information greatly appreciated.

Many thanks.

Please note that Egypt has changed its policy regarding registering properties fees. It USED TO BE 3% as you said, but now there is a fixed sum of money to be paid instead, which does not exceed (2000 EGP) regardless of the value of the property subject of sale and registration. This change purposes to encourage purchasers to register their properties, since the old system (3%) was a barrier for a lot of purchasers to register their properties, in order to avoid paying the previous huge sum of funds (3%).

In Sinai peninsula the situation is different, since there is no freehold right granted to foreigners in the first place, but only usufruct right for 99 years, the situation, and consequently the procedures, are different. Please read my other posts on the forum to get full knowledge of these procedures.

All the best,

Zeiad Yehia
Head of Legal Department
City and Urban International
Gendy Mall, King of Bahrain St., 2nd Floor,
Neama Bay, Sharm el Sheikh,
South Sinai, Egypt.
Telephone: +20 69 3601515
Fax: +20 69 3601520
Cellular: +20 12 3344988
email: [email protected]

 

[alison9071]

there are two ways to register a property in egypy
1, full registration will cost around £300 plus legal fees around £200 if you do this you will not be able to sell for 5 years
2. court registration, has all the protection of full registration but you can sell at any time and will only cost around £100 plus legals

 

[Peter Mitry]

Cost of Registration

We seem to have differing views here from Zeiad and from Alison & Andy who are agents in Hurghada. Does the system differ between registration of freehold properties in Sharm & Hurghada?

In Sahl Hasheesh the land was purchased by the Egyptian Resort Company and a town planning consultant from the UK was brought in to draw up the Master Plan. Every plot was then sold and plans were then submitted to the ERC and then to the local council for approval. There is then a system of checking to ensure building is in line with the consent given. The final receipt for the property is then registered with the local authority and Notarised at a cost of around 250k sterling (2500 Egyptian).

This seems to be a good workaround in the absence of a formal registration authority; what do others think of this?

 

[Zeiad Yehia]

there are two ways to register a property in egypy
1, full registration will cost around £300 plus legal fees around £200 if you do this you will not be able to sell for 5 years
2. court registration, has all the protection of full registration but you can sell at any time and will only cost around £100 plus legals

Please be informed that "registration" CANNOT be done via courts, registration is the highest form of protection and is done only through the notary office where registration is stamped on the margin of the sale contract.

Doing it through courts is NOT registration, it is a less form of protection that registration, but stands as the solely avalable choice for foreigners in some parts of Egypt "as for Egyptians also".

You were right in the part that when registration is applied, it can't be resold except after 5 years.

The situation in Sinai peinsula, and Sharm el Sheikh in particular, is different though.

Governmental fees for registering a property WHERE IT IS ALLOWED TO REGISTER doesn't exceed 2000 EGP, while legal fees for registration differ from a lawyer to another, but yeah it'd be within the range 300 GBP - 400 GBP, while these fees are higher when it's done through court, since it's not that easy process; it takes time and real effort, and fees in this case range 500 - 600 GBP.


Finally, I just care to shed light on the fact that there is nothing called "Court Registration", but there are 2 types of court suits; Signature Validity "The prevalent type", and Contract Validity "Rarely used, for it's very strict requirements".

For more information please check my legal presentation posted on this forum in another thread. Read the aapendix also please.



Zeiad Yehia
Head of Legal Department
City and Urban International
Gendy Mall, King of Bahrain St., 2nd Floor,
Neama Bay, Sharm el Sheikh,
South Sinai, Egypt.
Telephone: +20 69 3601515
Fax: +20 69 3601520
Cellular: +20 12 3344988
email: [email protected]
cui-egypt.com

 

[Zeiad Yehia]

We seem to have differing views here from Zeiad and from Alison & Andy who are agents in Hurghada. Does the system differ between registration of freehold properties in Sharm & Hurghada?

In Sahl Hasheesh the land was purchased by the Egyptian Resort Company and a town planning consultant from the UK was brought in to draw up the Master Plan. Every plot was then sold and plans were then submitted to the ERC and then to the local council for approval. There is then a system of checking to ensure building is in line with the consent given. The final receipt for the property is then registered with the local authority and Notarised at a cost of around 250k sterling (2500 Egyptian).

This seems to be a good workaround in the absence of a formal registration authority; what do others think of this?

Hi Peter, this is right, since Sahl Hashesh lies out of the geographical zone of the prime minister's degree, and consequently adhere to the normal registration process, after fulfilling the governorate requirements which differ from a governorate to another, but eventually, you CAN register your property there.

 

[mark 123]

UK based solicitor with the buying process sorted!

this is a really interesting set of threads. registering or ensuring ownership is clearly a major barrier for us to overcome if we are to invest in Egypt. It was certainly one of my 'showstopper' issues to address. I have spent some time with my solicitor on this subject and am now much clearer, and feel certain we have adopted the most appropriate course of action for buying in Hurghada. We bought at Regency Towers with Property Hotspots who were great and have developed a very clear contract model that reduces the pain and makes the whole process more comfortable for risk adverse and detail minded buyers like me! Our solicitor is Philip Morris of Legal Alliances Worldwide (LAW) Limited. He is well known for his earlier work in Morroco and is fast becoming the firm to go to for straightforward and cost effective legal advice inEgypt too. I thoroughly recommend LAW Limited based on my recent dealings with him - his details are:

PSG Morris
Solicitor & Managing Director

Legal Alliances Worldwide Limited
Beech House
2 Whinchat Grove
Kidderminster
Worcestershire
DY10 4TJ
UNITED KINGDOM

T - (+44) 01562 861989
F - (+44) 01562 864141

 

[Zeiad Yehia]

Dear Mr. Mark,

With all my respect to your post and to Mr. Morris, but you still need a local lawyer who is licensed in the Lawyers Bar of Egypt to act on your behalf in Egyptian courts, since any foreigner lawyer "however good he / she was" wouldn't be acceptable to represent you against Egyptian courts.

 

[mark 123]

Hi Zeiad
thanks for your feedback - yes you are correct about needing access to a local lawyer. Mr Morris has one that he works with and it is a real benefit for us in the UK because he can pass power of attourney over to the local lawyer at the appropriate time, and save us the challenge of seeking embassy approvals etc. Look him up I guess you could work well together too!

 

[dave99]

Hi
This does not look convincing. It would seem to imply that no developer can ever sell anything for 5 years since he will have registered the land then built on it making him the owner who then sells the apartments "second-hand" to a new owner who then tries to register, who then presumably cannot re-sell for 5 years. All this being said how can anyone ever sell by "flipping" presumably this because all they are selling is an option to buy not really buying anythning.

 

[dave99]

Can someone please identify the specfic law that prohibits sale of property for 5 years if the property is registered. Does this apply to every sale, ie the 2nd owner has to wait another 5 years and so on.
If this is true then this must have a dramatic affect on the re-sale market, or is this the prime reason that there is NO resale market in Hurghada.

 

[dave99]

Registration pack - any progress

hi jennian
it is not to difficult to register your property in egypt but you do need to be sure that you have all the relevant information i am working on putting a document together at the moment an easy step by step guide i am doing this withan international lawer based in the uk and with an egyptian lawer please send me your email and when it is ready i will gladly send you a copy but who ever you are buying from should know the basics regards selling your property after 5 years this depends on how you register it so not neccessarly so but i will be in touch thank you alison

Any idea when your guide will be ready - any chance of a copy please.

 

[dave99]

Formal Registration - Land ownership

Alison's comments are spot on. I work with Resort Alliance, the promoters of Sahl Hasheesh. Here the Developers have a master plan showing proof of ownership of the entire 32 million m2; each plot has been mapped and given a number and each Developer purchasing land has to submit a project for approval, first to the Egyptian Resort Company who own the land and subsequently to the local authority for planning approval.

Once this is granted there is a system of inspection and a final check that everything has been built according to plan. At this point the Developer will go with the purchaser to the Notary in Hurghada and register the purchase. The cost of this is around 350 GBP.

This is a workaround as Egypt does not have a formal land registry system at the moment.

Peter
In this note you have stated that the land is owned by the Egyptian Resort Company, does this mean that anyone purchasing in Sahl Hasheesh is buying leashold since you do not explain how the title to the land is passed on to the purchaser. I was assuming that each development site would be bought by the developer, then each apartment owner would buy what in effect is a "shared Freehold", from the developer.

 

[Peter Mitry]

Because the ERC is never going to be the final purchaser they do not register the land. They of course have receipts for the purchase and they know the history of the ownership (the land was owned by the government). ERC then sell the land in plots to the Developers, who equally understand that there are unlikely to be any title issues, so again, their purchase is not registered.
The first actual registration of the finished property will by the owner of each property and the title will be freehold. I hope this explains the procedure in Sahl Hasheesh. It may not be so clear cut if land is being purchased from individuals rather than from the government.

 

[Zeiad Yehia]

Can someone please identify the specfic law that prohibits sale of property for 5 years if the property is registered. Does this apply to every sale, ie the 2nd owner has to wait another 5 years and so on.
If this is true then this must have a dramatic affect on the re-sale market, or is this the prime reason that there is NO resale market in Hurghada.

Law No. 230 of 1996
On July 14, Law No. 230 of 1996 was issued superseding Law No. 56 of 1988. The new law allows non-Egyptians to own real estate whether built or vacant with the following conditions:
1. That ownership be limited to only two real estate properties throughout Egypt for accommodation purposes of the person and his family (family meaning spouses and minors),in addition to the right to own real estate needed for activities licensed by the Egyptian Government.
2. That the area of each real estate not be in excess of four thousand square meters.
3. That the real estate is not a historical site.
Exemption from first and second conditions is subject to the approval of the Prime Minister. Ownership in tourist areas and new communities is subject to conditions established by the Cabinet of Ministers.
Furthermore, non-Egyptians owning vacant real estate in Egypt must build within a period of five years from the date their ownership is effective (the date on which the realty is recorded at the competent Notary Public Office). Non-Egyptians may only sell their real estate five years after registration of ownership, unless the consent of the Prime Minister is obtained.

Answering your question: Yes it applies to EVERY sale as long as non-Egyptians are involved.