The chance for a better life.
Tel: 0030 27210 96614,
Fax : 0030 27210 62480
mobile: 0030 6977 52 40 39
e-mail: oconnor@oconnorproperties.gr
website: www.oconnorproperties.gr
Working hours: Monday to Friday 9 a.m. to 5 p.m.
THE MOST FREQUENTLY ASKED QUESTIONS
What type of properties can I expect to find to buy in Sharm El Sheikh - Egypt?
The O'Connor Properties has a variety of properties available.
From fantastic excellent-to-let apartments, to beachside villas overlooking the sea - there is normally something to suit every taste and budget.
In addition, if you are working within a set budget then O’Connor Properties will only show you properties that fit within your budget. It’s worth discussing fixed budgets and finances with O’Connor Properties prior to making your inspection visit.
If you wish to buy land and have a house/apartments built or have a house renovated either for yourself, or make, let’s say, four 2-bed apartments for rental accommodation, O’Connor Properties can introduce you to English speaking architects/civil engineers/contractors, who can build or renovate your "dream" house at a very reasonable price.
Their work is indeed very good, and combines all the modern facilities with the unique style of the Arabic architecture.
The recommended architects have crews of builders, plumbers, electricians, tilers etc, and they deliver the houses ready to move in.
Can everybody buy a property in Egypt – Sharm El Sheikh.
Foreign nationals are entitled to purchase and own real estate properties in Egypt subject to the restrictions stipulated by the Foreigners Ownership Law (law 230 for the year 1996).
The said law restricts foreign nationals' ownership of real estate in Egypt to
- No more than two properties; and
- Each property should not exceed 4000 sq . meter.
As regards purchasing property in the particular area of Sinai, (Sharm el Sheikh, Dahab, etc), foreign nationals cannot register their property with the government office of Real Estate and thus your lawyer will use the court route, and get your deeds stamped by the court, in order to finalise the purchasing process.
Without prejudice to said law, the purchase of real estates in Egypt by foreign nationals follows the same procedural course of action as it is the case for Egyptian nationals.
Do I have to have my finance in place prior to making an inspection trip?
It is advisable to have your finance in place before you make your inspection trip.
After all, if you find your dream home you will want to make arrangements for the purchase as soon as possible. Any delay can mean you miss out!
I’ve chosen my house in Egypt - now what happens?
You do nothing, your lawyer will do it all.
O’Connor Properties can recommend English speaking lawyers, on the strength of the recommendation of other clients who used their services and were highly satisfied.
It is best if your solicitor is registered in the area where the purchase is being made.
The transfer of title of real estate in Egypt is completed through two distinct phases, namely the execution of a private sale and purchase agreement between the seller and the buyer followed by the registration of title of the purchaser with the Real Estate Department and Public Notary, or, as in the case of Sinai, followed by the court route in order to stamp the contracts/deeds and finalise the purchasing procedure.
It is wise to sign a proxy in order that the lawyer can represent you in the following:
Step1.
Check the registration status of the property and review title documentation.
As outlined above, the transfer of real estate properties is perfected through the registration of property with the relevant authorities. This said, it is quite common in Egypt for property owners not to register their title in order to avoid paying the governmental registration fees amounting to 3% of the value of the property.
Hence, the first seminal step to be undertaken when purchasing property in Egypt is to check said registration status.
The status of the registration is determined through the review of the title documentation.
Furthermore, a comprehensive review of the title documentation should be undertaken in light of the original title documentation and not through copies, in order to ensure that no fraudulent title documents are provided by sellers.
Step 2.
Check if there are any pledges or mortgages registered on the property.
Under Egyptian law, mortgages and pledges are recorded on the property itself and are not affected by the transfer of the title. Hence, quite commonly a person who has just purchased a property can discover that his newly purchased property is pledged to a third party.
As such factor represents a serious exposure to your title, it is imperative that your lawyer ensures that the property you wish to purchase is clear and free from any third party rights such as mortgages and pledges.
This check is undertaken through the review of the Official Pledge Registers at the Notary Public located in the district of the property.
Step 3.
Ensure that all real estate taxes levied on the property are fully paid.
Under Egyptian law exists a real estate tax which is levied on the property itself and not on the owners of the property.
The rate of said tax differs as per the location and the standard of the property itself. This tax is not affected or prejudiced by the transfer of the legal owners and hence it is common for a new purchaser to discover- after completion of the property purchase- that he has to pay certain amounts to the Real Estate Tax Authorities. Accordingly, any prudent purchaser should instruct his attorneys to check the status of payment of the said tax prior to purchasing the property.
Step 4.
Drafting a bilingual comprehensive sale and purchase agreement.
The execution of private sale and purchase agreement between the seller and the purchaser is the first phase required under Egyptian law to transfer the title.
Quite commonly the seller produces an Arabic draft which in many cases is not readable by the expatriate and does not include all the guarantees, representations and protections that a prudent purchaser requires. Hence, it is highly recommendable that a comprehensive bilingual sale and purchase agreement is produced and/or reviewed by the purchaser's lawyers in order to ensure that no contractual exposure persists.
Step 5.
Registering the purchaser's title.
The registration of the title is the second phase required under the Egyptian law to transfer the title from the seller to the purchaser.
As a matter of fact, the execution of the sale and purchase agreement creates- from a purely legal perspective- legal and valid obligations between the seller and the purchaser but does not create any rights vis-à-vis third parties and the relevant authorities. In other words, the sale and the purchaser agreement can be used to counter any claims by the seller of the property but does not safeguard the purchaser from potential claims from third parties or the governmental authorities.
The registration of the property, or for the Sinai area the court route, is the procedure designated to safeguard the purchaser from the claims from third parties and governmental authorities.
There are two courses of action to undertake the registration of property which differ as per the initial registration status of the property. The two courses of action can be seen as follows:
• Registration of the property through the Real Estate Department and the Notary Public.
This mechanism is commonly used in the connection with the registration of title for properties which were initially registered by the sellers.
The timeframe associated with said procedures differs as per the status of the completeness of the registration documentation, but in all cases would remain in the range of three to six months.
When agreeing with the seller on the purchase price, the 3% registration fee should be taken into consideration; as such rate is calculated on the stipulated price of the property.
We strongly do not advice on illusionary smaller price on the contract to attempt to decrease the registration amount as such action creates a substantial future exposure on the purchaser.
• Registration of the property through the courts.
The second course of action available to register a property is a court action against the seller of the property requesting the court to issue court ruling confirming the validity of the sale of the property and claming the purchaser as the legitimate owner of the property.
The name of such court action is “claim requesting confirmation of the validity of the sale”. This course of action may take six to nine months.
This course of action is used primarily to register properties located in the new urban communities and Sinai.
Conclusion
Based on the above, we urge all expatriates who wish to purchase a property in Egypt to use a solicitor specializing in Real Estate to follow the five steps outlined above, in order to safeguard themselves from various potential problems and obstacles which may prejudice their title or their quiet and peaceful enjoyment of their newly purchased property.
If you so wish, our representative in Egypt or the lawyers we recommend will help you to open a bank account in Egypt.
Why pay a deposit?
Egypt, unlike the U.K., has no long chains of people selling and buying a property, which means that a purchase takes a very short time to conclude, and people mostly are cash buyers.
In order to avoid “Gazumping” your lawyer will advise you to put down a deposit
as soon as possible in order to secure the purchase and fix the agreed price.
How much deposit will I need to pay?
The deposit required is usually around 20 per cent of the agreed price, or the bigger the better. It is unlikely that the owner will be tempted to back out of the deal if he has to return a biggish deposit AND pay the same amount as a PENALTY out of his own pocket to the purchaser.
O’Connor Properties recommend 12.000 – 15.000 Euro.
What if there is a problem with the house I choose or the seller changes his mind?
If a problem arises for example, if the search reveals a problem previously unknown, then the deposit is automatically returned.
Should the seller decide not to sell after the deposit has been paid, then he must return double the amount of the deposit to the buyer.
If the buyer changes their mind after the deposit has been paid the deposit is not returned.
The deposit really acts as a mutual commitment between the vendor and the buyer.
How long will buying my house in Egypt take?
As soon as the search and topography are completed and the finances are in place, the private sale and purchase agreement between the seller and the purchaser (the purchaser’s lawyer), (exchange of contracts), which is the first phase required under Egyptian law to transfer the title, will take approx. 2 weeks.
The second phase, i.e.
registering the property through the Real Estate Department and the Notary Public usually takes three to six months.
or
registration of the property through the courts for new urban communities and Sinai usually takes six to nine months.
Will I have to pay tax on the purchase of my property in Egypt?
Yes, you will have to pay a one off Purchase Tax to the Egyptian government which is 3%.
If you are purchasing in the new urban communities and Sinai, then you will not pay purchase taxation, but court fees of approx. 2.000 Egyptian Pounds (approx. 290 Euro).
If you so wish, you could also register your property within the compound you are purchasing for approx. 5.300 Egyptian Pounds (approx. 760 Euro).
This is best discussed with your lawyer.
Apart from the cost of the property and taxation what other costs can I expect?
Other costs include the following:
Lawyer’s fees.
O’Connor Properties recommend lawyers who offer a fixed price for their services. Their fees are 1.000 Euro.
Surveyor’s fees.
We recommend that you have a survey on your property, which will also provide you with a topographical plan of the property you are purchasing.
The cost is approx. 250 Euro.
Do I have to pay O’Connor Properties a fee for finding me a property?
A 2,5 per cent fee is paid to O’Connor Properties for finding the property and for their service.
Do I have to pay O’Connor Properties an inspection fee?
No, we do not charge a fee for our properties in Sharm El Sheikh.
In what other ways will O’Connor Properties help me before and after the purchase of my property?
O’Connor Properties will offer advice on/or arrange for your flights and accommodation for inspection visits;
Our representative will escort you around as many properties as required;
When you find your “ideal home”, we will help you find an English speaking lawyer who with deal with the Egyptian authorities on your behalf and follow the 5 steps of the purchasing process mentioned above.
We will make arrangements for translation into English of the proxy, deeds and contracts;
If required we will help you find an architect/civil engineer/contractor;
Our representative or your lawyer will help you open a bank account.
If you so wish, O’Connor Properties can also offer advice on transportation of furniture; healthcare; residence permit; transfer of payments of British pensions into your Egyptian bank account; house insurance; etc.
If something happens to me will the property automatically revert to my next of kin?
If anything happens to you your property will automatically revert to your next of kin, according to the Christian laws in Egypt.
You could also make a will if you so wish.
The information provided is given in good faith and believed to be correct, but its accuracy cannot be guaranteed and cannot form part of any contract.
Chris and Mary O’Connor
