National Dialogue and the Real Estate Sector (2)

Dr. Mohammed Younis

The sessions of the national dialogue continue with confidence, opening a new window for creative interaction among different factions and allowing space for differences and discussions for a better future. The atmosphere of transparency, diversity, and clarity of vision during the opening of the discussion sessions of the national dialogue indicates a genuine determination to move forward in discussing national issues.

The significant engagement of various segments of society with the dialogue discussions and the media coverage thereof reflects the tremendous effort invested in preparing for this dialogue, especially by Mr. Diaa Rashwan, the general coordinator of the national dialogue, and Advisor Mahmoud Fawzi, the head of the technical secretariat of the dialogue.

Through the reactions and extensive interaction I observed after the publication of the first part of this article, it became evident how much the public follows and cares about not only what happens within the dialogue halls but also what is written about it in the media, particularly regarding the economic axis that touches the concerns of significant sectors of the population.

In my previous article published on May 13, I addressed some of the challenges facing the real estate sector and the issues experienced by those dealing with real estate companies and residential unit buyers. I have received numerous messages and comments emphasizing the importance of giving attention to the real estate sector within the economic axis of the national dialogue. It has become apparent that some real estate development companies employ methods that contradict market practices and mechanisms. They enter into contracts that maintain property ownership with the seller and grant them unlimited powers and rights even after selling all units, as if the buyer is merely paying a fee to the seller. Examples of this include wasting maintenance fees and later demanding monthly payments for maintenance and security. Additionally, some real estate companies fail to fulfill their obligations regarding finishing or delivering units on time. On the other hand, other companies force consumers to vacate their apartments when they are close to completing most of their installments, in order to resell them at a higher price. For instance, a buyer contracted for an apartment with a real estate development company in a project in the Fifth Settlement since 2016 and paid more than two-thirds of the installments. However, when he visited the project site, he was surprised to find that the company had not completed its work and did not deliver the residential units by the specified deadline in 2020. The company had collected the maintenance fees before the due date. Consequently, he stopped paying the remaining installments in accordance with Article 457 of the Civil Law, which allows the contracting party to withhold payment if the company fails to fulfill its obligations. When he learned that the company resumed work, he tried to pay the remaining installments and expressed readiness to pay the specified late fees. However, he encountered procrastination from the company's employees, and when he insisted on meeting one of the senior officials, he was surprised to find that they wanted to reprice the equivalent of these installments per square meter at a price of EGP 16,000 (more than three times the agreed price in the contract). In addition, they demanded a 60% increase in the value of the maintenance fees, which he had already paid in full. During the negotiations, he discovered that the company had filed a lawsuit to annul the contract. As a result, he was forced to pay these installments in court after the company refused to accept them. Despite the company's three-year delay in delivery and its failure to provide any compensation for this delay, which means a significant increase in the final finishing cost for the consumer since the apartment is handed over in a semi-finished state. The major disaster occurred when the company obtained a default judgment against him through deceit and misleading the justice system. They filed a bounced check claim without notifying the court that this check was the payment for one of the apartment installments he had already paid to the company. As a result, he paid the full price of the unit and the maintenance fees, yet he did not receive the unit. Instead, a judgment was issued against him for imprisonment, and he is now obligated to repay the value of the check or face imprisonment again. There are many other similar cases that necessitate subjecting the actions of such real estate companies to state supervision in order to protect citizens from fraud and circumvention of the law. It is imperative to enact legislation that regulates sales contracts and addresses the loopholes that harm the reputation of the real estate sector, while also protecting homebuyers from being subjected to extortion through such malicious tactics.