Everything you need to know about the new building reconciliation act: The Madbouly government’s new building reconciliation bill received final approval from the House of Representatives last week. The long-awaited law is set to make it easier for owners of unauthorized buildings built by 15 October of this year to legalize their properties in return for paying a reconciliation fee, and to set a clear procedure for the process. We have the rundown on everything you need to know about the amendments, as well as positive reactions from the industry, below.

Why were the amendments made in the first place? The law replaces a bill from 2019 that did not specify procedures for how local authorities would collect fees, leading to a backlog of unresponded reconciliation requests and unpaid fines.

The highlights:

  • We now have a standardized practice for collecting reconciliation fees, including measures like installment plans and reductions to help ease the process;
  • Buildings that lie outside of the scope of the law will be evaluated on a case-by-case basis;
  • Prime Minister Moustafa Madbouly now has the right to extend the period for reconciliation requests for another three years;
  • And there’s less red tape — especially for bigger buildings.

First thing’s first: Good news for buildings lying outside of the scope of the law. The government will accept reconciliation requests for buildings outside of the scope of its law and assess them on a case-by-case basis, according to a document detailing the law seen by Enterprise. Prime Minister Moustafa Madbouly was also handed the authority to establish committees to assess these cases, the document said. This includes buildings that defy regulatory requirements, like height, as well as buildings located outside of residential areas, according to the document. The one condition is for buildings in remote areas to be connected to utilities, with other conditions to be identified in the executive regulations, the document adds.

And for old reconciliation requests: The government will revisit all previously rejected requests made under the previous version of the act, the document said.

The committees will be tasked with ensuring the process is not stalling and that any challenges that arise are immediately addressed, Mohamed Al Fayoumi, the head of the House’s housing committee, told Enterprise.

There’s also good news for unfinished buildings looking for approvals: The law allows buildings that are still in their construction phase to resume construction until they receive their approvals, provided that a committee conducts a routine inspection to ensure the building is safe, according to the document.

Larger buildings get less red tape: Buildings built over a piece of land wider than 200 square meters will be exempt from having to submit a report from a consultant or an engineer, and will need only to submit the blueprint for the building, according to the document.

The good news for residents: The law sets a range of EGP 50-2.5k per square meter for reconciliation fees, according to the document. While residents are required to pay 25% of the fee upfront, they are now handed more lenient terms like three-year, zero-interest installment plans, and can also get reductions of up to 25% for people who pay the full amount upfront, the document said.

The gov’t will get bns of EGP in return: The government is expecting to rake in some EGP 100 bn in reconciliation fees, EGP 22 bn of which have already been collected, MP Ihab Mansour told us.

There are still some details to iron out: The executive regulations for the law are being drafted and should be out within two weeks, Al Fayoumi told us. The government is fine-tuning some details regarding buildings in violation of the law and buildings in governorates outside of Cairo, the sources told us. The regulations will be out once the act is ratified into law.

This is all good news for our real estate sector: The resumption of reconciliation processes in line with the new amendments will help speed up the process of issuing building permits, which have been stalling until the new amendments are drafted and brought into effect, Al Fayoumi said. The law will also help unify standards of building, which will give more impetus to the sector, a member of the Egyptian Real Estate Council, told us. It also helps address the problem of encroachment on agricultural land, El Degwy added.

Your top infrastructure stories for the week:

  • Egypt cements its name as a leading global outsourcer. Egypt came in third on Ryan Strategic Advisory’s Offshore BPO (business process outsourcing) Confidence Index for 2023.
  • Megamind eyes EGP 4 bn investment in healthcare automation: Saudi-based IT services and consulting firm Megamind is in talks to implement a EGP 4 bn project aimed at automating Egypt’s healthcare sector.
  • Cabinet approved allocating a 10k sq km land plot in the New Valley governorate and a 46.7 sq km plot in Benban to the New and Renewable Energy Authority (NREA)to build renewable energy stations.
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