You have a lot of options in Hurgada. You can "register" your property there. It's easy, and 100% protective. The only disadvantage for that would be that you wouldn't be able to resell the property for 5 years post purchase date.

Another option is to do like what we do here in Sharm, and go for the "Signature Validity" legal suit, whose protection is way less than registration "it's the sole option for foreigners in Sharm so far anyway", but would allow you to resell at any time you want "practically talking."

Please remember that you won't be able, however, to register your property unless the developer has registered the land plot subject of their project.

There is a third option by the way, but lawyers "including me actually" don't like to resort to it or even mention it except in emergency cases, it is called "Contract Validity" legal suit. This suit first of all wouldn't help foreigners in Sharm, secondly the state charges the purchaser 7.5% "yes 7.5%" of the purchase price, and it take loooooong time, a lot of document, and it is complicated.

In your case registration will be a good option if you don't intend to resell shortly. Please note that Egypt has halted the old registration system "charging 3% to register", and now there is a fixed governmental fee that depends on the property area, provided that the said fee shall not exceed EGP 2000, plus lawyer's fees.

I hope that that was helpful.

Thanks for mentioning this point so I can clarify it:

Firstly, according to law number 230 of 1996, the foreigner purchaser is PROHIBITED from selling their property within a 5 years time period. The word "prohibited" or "restricted" means that any sale that will take place before the 5 years restriction expires would be a "REVOKED" and "INVALID" sale.

You definitely can articulate a preliminary contract, but the question is..... is it in compliance with law? Answer is "NO." and subsequently the sale withing the 5 years will be legally valueless.

Now talking about the power of attorney. The PoA is a LEGAL TOOL that would allow someone to act on another's behalf.

In this case "which I am almost sure was an invention of some real estate agent" the alleged purchaser will not be a real purchaser, but merely an authorized representative of the landlord, having the power to do this and that, but ON BEHALF of the landlord, while the seller remains the true owner against the state's authorities.

I personally will never advise a client of mine to purchase a property this way, unless they REALLY trusted the seller and it was on their own responsibility, otherwise the seller might claim the property back and take it away from the new purchaser. This is just risky and wrong!!! Evenif it happens in practice, and even if estate agents use this method "I can hardly call it a method even" I still "being a lawyer" allow my clients to get involved in such a transaction.

AFTER the 5 years restriction expires, the landlord may feel free to sell their property to someone as a VALID and LEGITIMATE sale.

To cut the long story short....... any sale before the 5 years come to an end is illegal and valueless, and the PoA is - as abovementioned - not a title of deed, but just a legal authorization for (A) to act on (B)'s behalf, in the name of (B) and for the interest of (B).

All the best,

Zeiad Yehia
Solicitor

Interesting. I have a reservation fee down on an apartment in Hurghada. The "Due Dilligence" report from the Solicitor states that any owner selling within the first five years must give the developer first option to purchase. This would suggest that it is legal to sell within that period. If what you say is true, then it calls into question the quality and legality of the Due DIlligence!

Thanks for your posts, they're very informative.

__________________
Roger
There are only three types of people in the world - those who can count and those who cannot.
Pandora's Box

It depends here Roger, because they might mean "Relinquishment" and "waiver" to the developer, like taking the transaction back if you know what I mean, but not 'selling' it to the developer.

The law didn't distinguish between normal purchasers and develpers, the restriction was absolute. Consequently if the system you are talking about means that the purchaser will relinquish and waive the property to the developer, and then the developer will resell it, then it's fine, but if we're talking about a new sale between the landlord and the developer they bought from, then this is another issue, and it's illegal.

Just remember - to keep it simple - that NO ONE can 'purchase' within the 5 years. Period.

The reference - to keep it even more simple - is law, which clearly stated this restriction, and mentioned no exceptions for a developer or whatsoever.

However this restriction allpies only on 'registered' properties, while non registered ones are subject to any transaction until they get registered.

All the best,

Zeiad Yehia
Solicitor

Dear egypt,

This is almost similar to the situation in Sharm, where developers didn't register their projects yet. Your transaction is fine and you have nothing to worry about. Just remember to 'register' your property when the developer registers his project, and elieve me, practically talking, it's not a big deal. The main protection for foreigner investors in Egypt is not legal but political, and developers cannot mess with the state if you know what I mean. So practically talking you're very safe.

What really scares me is a transaction with a foreigner and a private owner, but when it comes to developers they're well monitored and had been officially approved by the state beforehand.

All the best,

Zeiad Yehia
Solicitor

Big time. Actually in order to transfer a new 99 years usufruct period to a new purchaser you'd have to go through the developer, and he'd charge you average of 5% for that.

However you can't 'register' usufruct, but you can obtain a "Signature Validity" court verdict on it.

All the best,

Zeiad Yehia
Solicitor

ok - new to this and I am confused! so - is it best to register the property or not. we were told as we would be buying a new property the company would register residents - with our permission of course - and we could sell at any time?

Hi Roger,

Thank you for the kind words it is really a pleasure to answer these questions.

Shared Freehold "in law" is the freehold shared between more than one owner i.e. a man and his wife buying a property together, kids who inherit a single property together...etc.

Other than that, it is really hard to imagine how can shared freehold be applicable on the case of a residential complex selling villas or flats out to individuals.

Before I jump to any conclusions / opinions I'll be glad to hear an explanation from the developer how exactly does they define "shared freehold" in this situation!

All the best,

Zeiad Yehia
Solicitor

It's not really an infinite lease, but it's a "complete transfer" for all rights on the property. In another words: the purchaser becomes the 'landlord' of the property, having the right to enjoy the property for infinite years, enjoy the fruits of the propery for infinite years, and also has the right to 'dispose' of the property physically or legally. I hope this helps.

Nope, in fact you can't. However, you still have 1 of 2 options:

Option 1: Seek an amendment wit the developer in order to add names.

Option 2: Make a separate contract between you and the other names and sell them portions of the property, and you can decide the percent.

All the best,

Zeiad Yehia
Solicitor