General Financial Regulatory Environment

FINANCIAL REGULATORY AUTHORITY

Chairman of the Authority

Decision No. (1495) of the Year 2018

Date: 20/12/2018

Regarding Real Estate Financing Contract Templates for Units Supported by the Social Housing and Real Estate Financing Fund

After reviewing Law No. (148) of 2001 on Real Estate Financing, as amended by Law No. (55) of 2014; The Executive Committee; Law No. (10) of 2009 regarding the regulation of supervision over non-banking financial markets and instruments; Presidential Decree No. (197) of 2009 issuing the Basic Statute of the General Authority for Financial Supervision; Law No. (93) of 2018 regarding Social Housing and Real Estate Financing Support; Board of Directors Decision No. (111) of 2015 regarding rules and standards for practicing real estate financing activities; Authority Chairman Decision No. (1076) of 2015 regarding real estate financing agreement templates; And the Memorandum from the Central Administration for Supervision and Oversight of Financing Companies dated 20/12/2018;

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PREAMBLE

(Article One)

The attached template regarding real estate financing for units supported by the Social Housing and Real Estate Financing Fund shall be applied, which are:

• Template (T/9) Real estate financing contract for purchasing a residential unit supported by the Social Housing and Real Estate Financing Fund, in accordance with the provisions of Real Estate Financing Law No. 148 of 2001, the Executive Committee amendments, and Law No. 93 of 2018 regarding Social Housing and Real Estate Financing Support.

• Template (T/10) Real estate financing contract for purchasing a residential unit within social housing units, in accordance with the provisions of Real Estate Financing Law No. 148 of 2001, the Executive Committee amendments, and Law No. 93 of 2018 regarding Social Housing and Real Estate Financing Support.

(Article Two)

This Decision shall be published in the Egyptian Gazette and on the Authority's website, and shall be effective from the date of its issuance.

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Chairman of the Board of Directors
Financial Regulatory Authority
Dr. Mohamed Omran

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Smart Village, Building no. B-136, Giza
Postal Code: 12577
Tel.: (00202) 35345350 - Fax.: (00202) 35370036 www.FRA.gov.eg

Smart Village, Building B-136, Giza, Egypt Postal Code: 12577 Tel.: +202 35345350 - Fax.: +202 35370036 info@fra.gov.eg

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Real Estate Financing Contract for Purchasing a Residential Unit within Social Housing Units

In accordance with the provisions of Real Estate Financing Law No. 148 of 2001, the Executive Committee amendments, and Law No. 93 of 2018 regarding Social Housing and Real Estate Financing Support

It is on this day __________ corresponding to __________ A contract was concluded between:

First:

The Social Housing and Real Estate Financing Fund, located at 4644 El-Giza Street – Dokki – Giza, Legally represented in this contract by Mr. __________ in his capacity as Chief Executive Officer and Legal Representative of the Fund pursuant to Prime Ministerial Decision No. __________, and signed on his behalf by Mr. Engineer __________ in his capacity as Director of the Housing Directorate in the Governorate of / Head of the Port Said City Development Authority.

(Party One - Seller)

Second:

Mr. __________
Date of Birth: __________
Nationality: __________ holding National ID No. __________ dated __________ and registered at __________ The residential unit subject to this contract shall be considered his chosen domicile and legal residence from the date of his taking possession of it.

(Party Two - Buyer)

Third:

Bank/Company __________ for Real Estate Financing (Joint Stock Company) licensed to operate in accordance with the provisions of the Real Estate Financing Law issued by Law No. 148 of 2001, the Executive Committee amendments, under No. __________, Commercial Register No. __________, with its main center at __________, and chosen domicile at __________, and commits to signing the agreement __________.

(Party Three - Financier)

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RECITALS

In light of the Central Bank of Egypt's initiative to stimulate and encourage real estate financing entities to expand in the field of real estate financing, while directing them to focus on low-income and middle-income groups, recognizing the social responsibility incumbent upon it alongside its economic role. This is to be achieved through structural reform of real estate financing by providing long-term financing at low interest rates to ensure appropriate support for the low-income category, in addition to the Social Housing and Real Estate Financing Fund's provision of cash support for a portion of the down payment for the low-income category, with the investor (Party Two) paying the remainder of the down payment.

Whereas Party One (the Seller) owns residential unit No. __________ on floor No. __________ located at property No. __________, street __________, city __________, governorate __________, with an approximate area of __________ square meters, subject to increase or decrease, and wishes to sell it.

Whereas Party Two (the Investor) wishes to purchase this unit under the real estate financing system in accordance with the provisions of the Real Estate Financing Law issued by Law No. 148 of 2001 and its amendments, and Law No. 93 of 2018 regarding Social Housing and Real Estate Financing Support. Party Two shall pay __________% of the unit's value as a down payment, as specified in Article Six of this agreement – which was appraised at the amount of __________ only __________, and which all parties to this agreement have accepted – as a down payment. Party One shall also provide an amount of __________ only __________ as support to Party Two, with the remainder to be paid in specified installments as outlined in this agreement. Simultaneously, Party One (the Seller) accepts the transfer of his right to these installments to Party Three (the Financier) for consideration, under agreed conditions. Party Two (the Investor) shall pay the installments to Party Three (the Financier) according to the attached schedule.

The Financier and Party Two (the Investor) who received the support provided by the Social Housing and Real Estate Financing Fund in this regard "which consists of a down payment support plus support for a portion of the monthly due installments or to support both the down payment and financing installments together; under the conditions set by the Fund according to the attached template prepared for this purpose" shall comply with the following.

And the parties declare that they have full legal capacity to contract and agree to the following:

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Article One

The aforementioned preamble, the schedule of conditions, and the attached annex are considered an integral and complementary part of the contract and its conditions. Furthermore, the provisions of the Real Estate Financing Law issued by Law No. 148 of 2001, the Executive Committee amendments, and decisions issued by the Financial Regulatory Authority implementing it, and Law No. 93 of 2018 issuing the Social Housing and Real Estate Financing Support Law, and decisions of the Fund's Board of Directors implementing it, are considered an integral part of this contract. Their provisions shall apply to matters not specifically addressed in this agreement, and they shall take precedence in application in case of conflict with other provisions. All attachments and annexes to this contract are considered an integral and complementary part of this article.

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Article Two

Subject of the Agreement

Party One (the Seller) hereby sells, transfers, and assigns to Party Two – the Investor – the residential unit without any share in (the land, common areas, roof, and facades), detailed as follows:

Specifically as follows:

(1) Details of the Property containing the subject unit:

• No.: __________
• Street: __________ District: __________ Neighbourhood or Division: __________ City: __________
• Governorate: __________
• Northern Boundary: __________
• Eastern Boundary: __________
• Western Boundary: __________
• Southern Boundary: __________
• Property Description: __________

(2) Details of the Subject Unit:

• Unit No.: __________ in Property No.: __________
• And its boundaries are as follows:
  • Northern Boundary: __________
  • Eastern Boundary: __________
  • Western Boundary: __________
  • Southern Boundary: __________
• With an area of: __________ approximately including amenities

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Article Three

Ownership

Party One (the Seller) acknowledges that ownership of the property or unit subject to sale under this agreement was acquired by him pursuant to Prime Ministerial Decision No. 1303 of 2015 and Law No. 93 of 2018, and that it is owned by him free of any original or accessory real rights held by others. He further acknowledges that it is not leased or sold to others, and that he possesses it peacefully and visibly without any physical or legal interference from third parties. That the buildings were constructed in accordance with valid permits issued by competent official authorities, and their physical execution complied with permits, technical rules, and standards. That there are no violations of any kind.

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Article Four

Acknowledgment of Inspection

Party Two (the Investor) acknowledges that he has inspected the fully specified residential unit subject to this contract, accepted it in its current condition, and has no right to demand its replacement.

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Article Five

Transfer of Unit Ownership

Party One commits to providing the necessary documents to register the sold unit in the name of Party Two, free of any real rights held by others, with Party Three's right to conduct a mortgage and claim a privilege right in his favor on the subject unit until the full payment of the price is completed.

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Article Six

Price

The residential unit specified in Article Two of this contract was sold for a total value of __________ Egyptian Pounds "only and no more".

Party One (the Seller) acknowledges that Party Two (the Investor) has paid him from the total price of the sold unit upon signing this contract an amount of __________ only "and no more".

And that Party Three has paid him an amount of __________ only "and no more" from the granted financing value.

The value of the support granted by the Social Housing and Real Estate Financing Fund amounts to __________ only "and no more".

Consequently, the total amount paid to the Seller (Party One) is __________, amounting to __________ only "and no more".

Party Two (the Investor) commits to paying the financing value granted to him by Party Three (the Financier), including financing costs, in monthly installments for __________ months according to the installment schedule attached to this contract.

The parties also agreed that the attached payment schedule shall clearly state the installment values for financing and its costs, the number of installments, their values, due dates, and any other expenses added to financing costs or deducted from the investor's account. The payment schedule shall be considered an integral and complementary part of this agreement.

Party Three shall secure a privilege right on the installments for this sold unit according to Article Two and the remaining provisions of this agreement.

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Article Seven

Protection of Right to Installments

Party One (the Seller) acknowledges acceptance of protecting his rights to the price installments by transferring them to Party Three for a prompt consideration and under agreed conditions pursuant to a separate document (attached to and complementing this agreement) containing the provisions and effects of this protection, which include the statutory privilege right on the price for the sold unit.

The installments due on the unit (to the Seller) under this contract shall be considered collectively settled and discharged upon receipt of the full prompt consideration for the right, and Party Two's (the Investor) signature on this contract shall be considered his acceptance of this transfer and his acknowledgment of its enforceability against him.

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Article Eight

Obligations of Party Two (the Investor)

Party Two (the Investor) commits to the following:

1. Paying the full price installments on the agreed dates directly to Party Three according to this agreement.

2. Paying any subsequent obligations due on the unit upon occupation, including fees, taxes, or otherwise to any government authority, without having the right to recourse against Party Three for any consequences arising therefrom.

3. Paying the maintenance deposit amounting to 5% of the residential unit's value, which is non-refundable and represents the subject unit's share in the maintenance deposit. The Social Housing and Real Estate Financing Fund shall solely manage and invest it (without any investor intervention) to cover maintenance of common areas, attached facilities, and preserving the general appearance, architectural character, and urban coordination of social housing properties, which include (external facilities between properties – site coordination – external cleanliness – external management – property facades – property roofs) according to the controls set or approved by the Fund's Board of Directors, without any right of objection from the investor, provided this is within the yield of the maintenance deposit collected from owners of those properties.

Regarding the maintenance of common parts (corridors – spaces between units – stairs) of the property containing the residential unit subject to this contract, the occupants shall be responsible for it according to the Civil Code and Construction Law No. 119 of 2008. Party One shall carry out maintenance work for which the occupants are responsible through a special agreement between them specifying the consideration, payment method, and schedule, whether as a lump sum or periodic subscription paid by the occupants to Party One. This special agreement may be concluded between Party One and Party Two (the Investor) in case the occupants' association is not established or activated. Party One and Party Two (the Investor) must intervene for maintenance or repair of the premises. Party One also has the right to repair and maintain common parts of the project plan, architectural coordination, and in case Party Two (the Investor) fails to pay this value, the Fund is entitled to take legal measures to collect it.

The Fund may contract with any specialized companies for this purpose. The investor acknowledges that the Fund is not obligated to return this deposit or its yield at any time after the contract date. It is agreed that in case maintenance expenses exceed the collected amounts

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Article Nine

Rights of Party Two (the Investor)

Party Two (the Investor) is entitled, after obtaining written consent from Party Three (the Financier), to the following:

1. Dispose of the subject unit by sale, gift, or other transactions, or establish any real right on it, on condition that the transferee accepts to assume Party Two's (the Investor) obligations under this agreement. This requires written consent from Party Three (the Financier) and the Social Housing and Real Estate Financing Fund according to established controls and previously mentioned obligations.

2. Party Two is also entitled to lease the unit to others or allow others to occupy it individually after obtaining written consent from Party Three under conditions attached to this consent. The Financier may stipulate the right to the unit's rent or occupation fee as settlement of his dues, according to controls set by the Social Housing and Real Estate Financing Fund and previously mentioned obligations in this regard.

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Article Ten

Obligations of Party Three (the Financier)

The Financier commits to the following:

1. Enable the investor to inspect the fully specified residential unit.

2. Enable the investor to occupy and peacefully possess the unit, guaranteeing no interference with this possession until the agreement period is completed.

3. Notify the investor at least twice a year of all data related to the financing agreement.

4. Notify the investor of the institutions where his rights are registered and the payment method for installments if any changes occur.

5. Disclose to the investor all details of expenses to be added to the financing cost.

6. Add to the cost only the administrative expenses disclosed to the investor.

7. Notify the investor of any information that comes to his knowledge which may affect his real estate guarantee.

8. Maintain confidentiality of customers' complete data and not disclose any information about them or their transactions to third parties without their prior written consent, within the limits of this consent, except in cases where specific information must be provided to the Authority.