The Old Rent Law has been one of the most widely discussed topics in recent months, especially after the implementation of its new amendments, which took effect on August 5.
The amendments set a minimum rental value of EGP 250, alongside government-led field surveys to assess housing conditions and units. The aim is to determine a fair rental value ranging between EGP 250 and EGP 1,000.
Rent Increases Under the Old Rent Law
According to the new law, tenants are required to bear seven gradual increases during a defined transitional period. These increases fall into two categories:
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The first category: A fair adjustment of rent, ranging from EGP 25 to EGP 1,000, based on the evaluation of the area and property specifications.
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The second category: Annual increases of 15% on the rental value, continuing for seven years until the end of the transitional period.
Key Articles of the Old Rent Law
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Article One: This law applies to residential properties as well as non-residential units rented by individuals, in accordance with earlier legislations, including Law No. 49 of 1977 and Law No. 136 of 1981.
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Article Two: All lease contracts for residential and non-residential units under the provisions of this law will be terminated after a specified transitional period—seven years for residential units and five years for non-residential units—unless the parties mutually agree to end the contract earlier.
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Article Three: Committees formed by a governor’s decree will classify real estate zones into three levels: premium, mid-range, and economic. This classification is based on multiple criteria, including geographical location, neighborhood characteristics, construction materials used, public facilities available, and prevailing annual rental values in the area.
These committees must complete their work within three months from the date the law is enforced, with the possibility of extension by decision of the Prime Minister. -
Article Four: Starting from the rent due date following the enforcement of the law, rental values for residential units are set with the following minimums:
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Premium areas: Twenty times the previous value, with a minimum of EGP 1,000.
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Mid-range areas: Ten times the previous value, with a minimum of EGP 400.
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Economic areas: Ten times the previous value, with a minimum of EGP 250.
Tenants are obligated to pay the difference in rental value once the survey committees conclude their assessments, distributed over monthly installments in line with the rent due period.
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Article Five: For non-residential units rented to individuals, the legal rental value is set at five times the previous rent.
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Article Six: Rental values determined under Articles Four and Five will increase annually by a fixed 15% periodic increment.
Purpose of the Amendments
These amendments aim to establish a better balance between the rights of landlords and tenants, ensuring a fair legal settlement for rented properties.
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