As per presidential decrees issued by President Abdel-Fattah al-Sisi last September in accordance with article 115 of the Constitution, the House of Representatives convened on 2 October 2021 to start the second ordinary legislative session of its second term, and the Senate convened on 5 October commencing the second legislative session of its first term.
The House of Representatives started with procedural sessions that involved the election and formation of the House’s specialised committees. It announced its legislative agenda of bills submitted by the government or by MPs, which had been on the House’s previous agenda, or were proposed for this session. Among the bills carried forward to this legislative agenda is the bill for amending the old rental law for housing units; this bill is long overdue and has figured on agendas of several past parliamentary sessions, but other legislative and parliamentary burdens always managed to push it down on the list. So far, three legislative sessions were adjourned without tackling that bill which then remained on hold along with other bills that I plan to discuss in future editorials. The bill was presented by the government to the House of Representatives’ Housing and Facilities Committee in mid-2019. Today, we have reached the point where amending the old rental law has become a pressing matter, because an existing legislative duality must come to an end.
The overlooked duality figures in major aspects of rentals in Egypt. Major among them is the fact that current rentals swing between values fixed by the [old] rental law, and others that [legally] move according to the market rules of supply and demand. This applies to residential and non-residential housing units alike.
The old, fixed rentals go back to the 1960s when, among a bunch of socialist revolutionary decisions taken by Egypt’s President Gamal Abdel-Nasser, rental values were frozen indefinitely and rental contracts immortalised. On the face of it, the move favoured tenants, who were then regarded as less privileged than landlords, but it practically turned them by law into de-facto owners of the houses they rented. The rights of the actual owners, on the other hand, were thrown to the wind. The result over some 60 years has been a disastrous decline in the value of Egypt’s real estate wealth, and grave negligence in the maintenance and facilities of buildings, given that the cost of such maintenance had gone far beyond the rental value collected.
The law which froze the rentals made no provision for any periodic increase in their values. The result was that the rental values which were some 60 years ago consistent with average incomes, purchasing power and day to day expenses, became increasingly inadequate as subsequent decades saw exponential rises in incomes and prices. The injustice in the tenant-landlord relationship became entrenched; the meagre rentals that pampered—even spoiled—tenants were the epitome of injustice and humiliation for landlords, especially those who depended on rent as a source of income.
Legislative duality figures in another rental law which concerns residential housing units built before or following 1996 when a new law gave free reign to rentals of residential housing units built following that date. This calls for a stand against this legislative glitch, to revise and unify rentals for residential housing units, out of legislative justice and to avert duplicity and discrimination.
Non-residential units too fall under legislative duality, but in a less flagrant manner. In the 1980s, the law unfroze the rental values for non-residential housing units through making provisions for a yearly increase in rental value. However, even following repeated increases, the rental values for pre-1996 non-residential units remain much lower than post-1996 rentals. This legislative glitch ought to be addressed and rectified.
I am hopeful that Parliament would, during its current legislative session, reform the legislation governing rentals in order to establish long overdue justice. Once this is achieved, order would be restored to the real estate market, and discrimination between old and new building rentals would be a thing of the past. Tenants would cease being de-facto owners of the units they rent, and landlords would regain their rights and prestige as the lawful owners that they are.
8 October 2021