Egypt: A Bank Account for Every Real Estate Project to Protect Buyers
The Egyptian Minister of Housing introduced new regulations to govern the real estate market, including an independent bank account for each project, linking disbursements to construction progress, and audited financial statements.
The Minister of Housing in Egypt has established a roadmap to regulate the real estate market and protect buyers, based on separating the accounts of each real estate project from others and controlling sales and disbursement processes.
Under the proposal, an independent bank account is designated for each project, and the disbursement of funds is tied to actual construction progress. The project consultant will monitor these works and submit periodic reports, preventing buyer funds from being directed to another project.
The regulation requires developers to submit audited financial statements every six months, alongside a mechanism for addressing delayed delivery that grants the developer a grace period of up to 12 months before the buyer is entitled to a refund.
The proposal also imposes restrictions on advertising and selling units prior to obtaining ministerial and planning approvals, in a step aimed at reducing risks for buyers, regulating transactions, and ensuring the seriousness of developers in the Egyptian market.
What do these terms mean?
Off-plan sales: Purchasing a residential unit before it is built, relying on project plans and developer promises regarding delivery dates.
Audited financial statements: Official financial records reviewed by an independent accountant to ensure accuracy and correctness.
Delayed delivery: Failure to deliver the unit on the agreed date, which the new regulations establish a mechanism to address.
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