I wonder what will happen after the historic Supreme Constitutional Court ruling regarding the old lease? Will tenants be able to keep their apartments? And the owners who have been waiting for their situation to improve for years… will they take their rights?
The Supreme Constitutional Court issued a “historic” ruling that some provisions that linked the relationship between landlords and tenants in the old rental law were unconstitutional, including the decision to fix the annual rent for residential units.. In other words, the situation that has existed for more than 60 years between the landlord and the tenant is about to change. The big one
In order to understand the issue more, we need to go back a little, Laura.. This old rent law was in place in the past to protect tenants from repeated rent increases, and the law preferred to fix rents from that time.. but the problem is that over the years, the rent value in the law has become completely inconsistent with the prices now.. This has created a special crisis for owners who have apartments with fixed and very low rents, while market prices are now many times higher.
What will the new ruling do?
In short, the court said that fixing the rent in this way is no longer fair, and that a balance must be found between the two parties so that there is no pressure on the tenants, but at the same time the owner is not deprived of his natural right to a reasonable return on his property.
This means that the relationship between the landlord and the tenant will be somewhat liberated, and the tenant who leaves the residential unit closed or does not benefit from it will either leave it or negotiate with the landlord on a new rental price suitable for the market.
Ok, the question that many people might ask is: When will this ruling actually begin to be implemented?
The Constitutional Court gave a deadline for the House of Representatives to issue a new law regulating this relationship so that it sets controls for determining the new rent for residential units according to each geographical area. This will require new legislation that can be discussed before the end of the current legislative session, which is expected to end within two months.
Will this decision solve all the problems?
There is a possibility that some kind of controversy or even tension will occur, because on the one hand, the tenants who were dependent on the fixed rent may feel new pressure, and on the other hand, the landlords who were trapped in a situation that did not achieve a return on their investments will begin to take their opportunity to improve their situation.
According to semi-official estimates, we have about 2 million housing units subject to the old law, and the value of these units is estimated at about one trillion pounds. This means that when the ruling is implemented, we are talking about a very large impact on the real estate market in Egypt. What happened is that Parliament became obligated to specify additional categories. The rent is annually and a solution is reached that preserves the rights of both parties, the owner and the tenant, within a transitional period that ensures the balance of matters
The Constitutional Court also confirmed that the law must preserve the rights of tenants and not impose sudden pressure on them. In other words, there will be controls and alternatives to maintain the balance, and this is the role of Parliament, which will try to ensure that it achieves this balance.
Analysts believe that this ruling could be a positive step towards reforming the situation of the real estate market in Egypt, which has remained subject to exceptional laws for long decades. The ruling is also consistent with the government’s plan to regulate the market and amend laws in line with economic changes.
But there are also fears that a sudden increase in rents could raise housing costs, especially in major cities such as Cairo and Alexandria, which have a large percentage of units under the old rental law.
In conclusion: we are truly facing a moment of change. This ruling not only amends an old law, but it reconsiders the basics of the relationship between the landlord and the tenant, a relationship that has been stable for many years. We will follow the developments in the matter and the role of Parliament in issuing the new law that will regulate the issue. We will convey to you all the latest news.
