Ahmed Kamel – Egypt Daily News
In a significant legislative shift aimed at resolving one of Egypt’s longest-standing property disputes, President Abdel Fattah El-Sisi has officially ratified two pivotal laws Law No. 164 of 2025 and Law No. 165 of 2025 overhauling the framework of the old rental system that has governed tenant-landlord relationships for decades.
These reforms, passed by the House of Representatives in July 2025, are intended to gradually transition properties rented under the so-called “old rent” system toward market-aligned practices, balancing the interests of tenants and property owners while preserving social stability.
Key Features of the New Legislation
Phased Termination of Old Rent Contracts
Under Law No. 164, residential lease agreements governed by the old laws namely Laws No. 49 of 1977 and No. 136 of 1981 will expire within seven years of the law’s enforcement. Non-residential leases for natural persons will terminate after five years, unless both parties agree to an earlier termination. These changes mark the beginning of a transitional period during which the state aims to regularize longstanding housing contracts.
Rent Increases and Area-Based Classification
The law introduces a mechanism for rent reassessment based on property location. Provincial governors will establish committees tasked with categorizing neighborhoods into three tiers: prime, middle-income, and economically modest zones. This categorization will influence the updated rent structure:
- In prime areas, monthly rent will be adjusted to 20 times the current legal rate, with a minimum of 1,000 EGP.
- In middle-income areas, rent will be increased to 10 times the current legal rate, with a minimum of 400 EGP.
- In economically modest areas, the minimum rent is set at 250 EGP.
Until the committees complete their classification, all tenants will temporarily pay a flat rent of 250 EGP. Once classifications are finalized and officially announced, tenants will be required to pay the difference in installments over a period matching the duration of the underpaid months.
Annual Increment Clause
Rents recalculated under the new system will also be subject to a 15% annual increase, helping rents gradually approach market values over time.
Eviction Clauses and Legal Remedies
The law outlines strict conditions for eviction upon expiration of the transitional period, or sooner if:
- The tenant leaves the property unoccupied for more than a year without justification.
- The tenant owns another property suitable for the same purpose within the same region.
In such cases, landlords may seek expedited eviction orders through the summary court system. While tenants may contest these orders in civil court, the legal challenge will not suspend the execution of the eviction order.
State-Facilitated Relocation Options
In a bid to cushion the impact on vulnerable tenants, the government is offering those affected by the old rent law the opportunity to apply for alternative housing. Tenants (or legal successors under the old laws) can request state-owned rental or ownership units, with priority given to original tenants or their spouses. To qualify, applicants must pledge to vacate their current rental units once the state housing is allocated. The Cabinet is expected to issue regulations within a month outlining the process and eligibility criteria.
Legal Clean-Up and Sunset Clause
Law No. 164 also includes a sunset provision: after seven years from its effective date, Laws No. 49 of 1977, No. 136 of 1981, and amendments from Law No. 6 of 1997 will be repealed entirely. This represents a definitive legislative closure to the decades-long era of frozen rental values.
Parallel Legislation: Law No. 165 of 2025
Complementing the primary reforms, Law No. 165 amends Law No. 4 of 1996 to clarify the legal handling of properties that were never rented or whose leases have expired. The new article explicitly states that tenants or their legal heirs or successors must vacate such properties at the end of the lease term. Landlords can petition summary courts for eviction orders without prejudice to their right to compensation. While tenants may file civil lawsuits to challenge eviction, doing so will not delay enforcement of the court order.
Societal Impact
These legislative changes aim to resolve a chronic imbalance that has constrained property development and urban renewal for decades. While advocates for property rights view the reforms as long overdue, critics warn that without robust social safeguards, low-income families may face increased housing insecurity. The government’s promise of priority access to alternative housing units will likely be critical in determining how smoothly the transition unfolds.
President El-Sisi signed the laws on August 4, 2025 (corresponding to 10th of Safar, 1447 AH), marking the beginning of a new chapter in Egypt’s approach to property rights, urban development, and housing equity.
