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.

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

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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.

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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.

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.

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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.

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) !!!

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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.

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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......!!

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PROPERTY SHOP INC. International Property Brokers
EGYPT REAL - Your One Stop Shop for Hurghada Property
Investment Property in Egypt

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