Official Gazette - No. 26 Duplicate (E) on 2 July 2014

Decision of the President of the Arab Republic of Egypt

on Law No. 55 of 2014

Amending Certain Provisions of the Real Estate Financing Law

and the Law Issued by It No. 148 of 2001

President of the Republic

Having reviewed the amended Constitution issued on 18 January 2014;

And the Civil Code;

And the Penal Code;

And the Criminal Procedure Code;

And the Stamp Tax Law issued by Law No. 111 of 1980;

And the Insurance Supervision and Control Law issued by Law No. 10 of 1981;

And the Joint Stock Companies, Partnerships Limited by Shares, and Limited Liability Companies Law No. 159 of 1981;

And the Capital Market Law issued by Law No. 95 of 1992;

And Law No. 95 of 1995 concerning Financial Leasing;

And Law No. 230 of 1996 regulating the ownership of built properties and vacant land by non-Egyptians;

And the Commercial Law issued by Law No. 17 of 1999;

And the Real Estate Financing Law issued by Law No. 148 of 2001;

And the Central Bank, Banking System, and Currency Law issued by Law No. 88 of 2003;

And the Competition Protection and Anti-Monopoly Practices Law issued by Law No. 3 of 2005;

And the Income Tax Law issued by Law No. 91 of 2005;

And the Law Regulating Supervision on Non-Financial Markets and Instruments issued by Law No. 10 of 2009;

And the Sukuk Law issued by Law No. 10 of 2013;

And with the approval of the General Authority for Financial Supervision;

And with the approval of the Council of Ministers;

And based on what the State Council deemed appropriate;

---

Official Gazette - No. 26 Duplicate (E) on 2 July 2014

Decreed

The following Law is enacted:

(Article One)

The text of Article Two of Law No. 148 of 2001 issuing the Real Estate Financing Law is replaced with the following:

In applying the provisions of the accompanying Law and the decisions issued in implementation thereof, the following words and expressions shall bear the meanings indicated alongside each of them:

(أ) Competent Minister: The Minister responsible for applying the provisions of the Law Regulating Supervision on Non-Financial Markets and Instruments issued by Law No. 10 of 2009.

(ب) Authority or Administrative Body: The General Authority for Financial Supervision.

(ج) Real Estate Financing: Financing in any of the activities specified in Article (1) of the accompanying Law or those added by decision of the Competent Minister following the approval of the Authority's Board of Directors.

(د) Real Estate Refinancing: Refinancing entities engaged in real estate financing activities.

(هـ) Lease: Property leasing that ends in ownership.

(و) Real Estate Guarantee: The guarantee provided for real estate financing.

(ز) Secured Property: The property subject to a lien, formal mortgage, or other guarantees.

(ح) Investor: The person or entity that obtained financing other than in a purchase case.

(ط) Company: Any company exercising one or more of the real estate financing activities specified in Article (1) of the accompanying Law.

---

Official Gazette - No. 26 Duplicate (E) on 2 July 2014

(Article Two)

The texts of Articles (1, 2, 4, 5, 6, 11, 28, 33, 34, 35, 36, 40, 42, 46, 47, 50, 51) of the Real Estate Financing Law issued by Law No. 148 of 2001 are replaced with the following:

Article (1)

The provisions of this Law shall apply to real estate financing activities, which are:

(أ) Financing the purchase, construction, renovation, or improvement of properties for residential purposes, administrative units, service facilities, and spaces designated for commercial activity.

(ب) Leasing, subject to the provisions of Law No. 95 of 1995 on Financial Leasing.

(ج) Financing the purchase of usufruct rights over properties.

(د) Financing the purchase of properties under the joint ownership and partnership system.

(هـ) Real estate refinancing.

The Competent Minister may, with the approval of the Authority's Board of Directors, add other activities in the field of real estate financing.

Such financing shall be secured by a lien on the property, a formal mortgage, or other guarantees acceptable to the financier according to the rules, procedures, and conditions specified in the Executive Regulations of this Law.

Article (2)

Without prejudice to the jurisdiction of the Competition Protection and Anti-Monopoly Authority, the Authority shall be responsible for regulating, supervising, and overseeing all real estate financing activities specified in this Law.

---

Official Gazette - No. 26 Duplicate (E) on 2 July 2014

Article (4)

The exercise of real estate financing activities specified in this Law shall be conducted according to the rules and standards specified by the Authority's Board of Directors, ensuring financing aligns with the applicant's financial capacity in light of general market conditions.

The Authority shall issue rules, procedures, financing conditions, credit limits, and financing-to-property-value or guarantee ratios as applicable.

Licensed financing and refinancing entities shall have the right to determine financing costs without being bound by maximum limits set in any other law.

The value of the secured property shall be assessed by certified valuation experts whose names are listed in tables prepared by the Authority for this purpose, provided that none are employed by any party to the financing transaction.

The Executive Regulations shall specify the rules, conditions, and procedures for adhering to these tables.

Article (5)

Without prejudice to the provisions governing the Real Estate Financing Support and Guarantee Fund specified in Article (35) of this Law, the State, represented by the authorities having jurisdiction over state lands, shall support low-income housing by allocating land free of charge for the construction of economically priced housing, bearing the actual cost of providing public utilities for them or a portion thereof, or through other forms of support.

A decision by the Fund's Board of Directors shall determine the conditions and rules for eligibility for such housing, and the criteria for classifying low-income housing projects.

The Executive Regulations shall specify the real estate financing criteria for them.

---

Official Gazette - No. 26 Duplicate (E) on 2 July 2014

Article (6)

Real estate financing shall be conducted pursuant to an agreement between financing parties according to models approved by the Authority, which shall specifically include the following:

(أ) Details of the property and its price.

(ب) The amount of the down payment to be paid from the property price.

(ج) The number and value of installments for the remaining price and the conditions for accompanying them, to be fixed or determinable in advance using a fixed formula linked to an official indicator specified by the Authority to calculate changes in financing costs, up to full settlement.

(د) The seller's acceptance of transferring their rights in the installments and associated guarantees to the financier under agreed conditions.

(هـ) The investor's commitment to register a lien on the transferred installments to the financier as security for their settlement.

(و) The parties' commitment to record the financing agreement date and notarize it through the Official Notary Public or authenticate it as applicable, and affix the executive version thereto. All procedures under this paragraph shall be exempt from all fees, taxes, and duties.

The Executive Regulations shall specify other conditions and data to be included in financing agreements according to their nature.

Article (11)

The financier may assign its rights arising from the financing agreement, whether by ownership or mortgage, directly to the Company or any licensed entity engaged in the financing activity, provided that the securing agreements are registered as a possessory mortgage, all in accordance with rules specified in the Executive Regulations of this Law.

The mortgage contract shall be registered in the Authority's ownership register or that of an entity specified by its Board.

The financing agreement must include the investor's acceptance of the assignment of the financier's rights to one of the entities mentioned in the first paragraph, and the investor shall be notified of the assignment, with the agreement specifying the notification method.

---

Official Gazette - No. 26 Duplicate (E) on 2 July 2014

Article (28)

The Company shall take the form of an Egyptian joint-stock company, and its issued and paid-up capital shall not be less than the limit specified in the Executive Regulations.

Exception to Article One of the issuance articles of this Law, the provisions of Law No. 230 of 1996 on regulating the ownership of built properties and vacant land by non-Egyptians shall not apply to Companies subject to this Law, regardless of the percentage of non-Egyptian capital, except for the provisions of Article (Two) clause (3) and Article (Four) of the aforementioned Law.

Licensing to exercise real estate financing and refinancing activities shall be governed by the provisions of the following Articles and what the Executive Regulations of this Law specify.

Article (33)

The Company shall prepare and submit financial statements to the Authority according to standards and within deadlines specified by the Authority's Board of Directors.

The Company's accounts shall be audited by two auditors registered in the register maintained by the Authority for this purpose, according to auditing standards specified by its Board.

Article (34)

The Company shall not merge with another company operating in the same or other activity, cease operations, liquidate its assets or the majority thereof, or acquire shares in real estate financing companies without obtaining prior written approval from the Authority, otherwise the merger shall be legally ineffective, all according to rules and procedures specified by the Authority's Board.

The Authority may refuse approval for serious reasons related to the stability of the real estate financing activity or the interests of investors or shareholders.

Article (35)

A Real Estate Financing Support and Guarantee Fund is established, possessing public legal personality and subordinate to the Competent Minister.

The Fund shall be responsible for supporting the real estate financing activity in the sale, usufruct, or leasing of properties ending in ownership, and may also support residential leasing, all for low-income individuals through all means, including bearing a portion of the installment value in cases of property sale or lease-to-own, ensuring financing burdens align with their income, provided the installment does not exceed the maximum limit set by the Authority's Board.

The Fund may conduct activities and take necessary measures to achieve its objectives and guarantee against risks of non-payment arising from real estate financing, including establishing or using specialized companies or funds, or providing guarantees to facilitate financing for financiers or investors, or other means approved by its Board.

A presidential decree shall specify the Fund's other competencies.

Article (36)

The Fund's resources shall consist of:

1. Contributions that the financier and investor are obliged to pay equally to the Fund according to its bylaws, provided they do not exceed 2% of the financing installment. These contributions shall be allocated to settle installments of defaulters according to rules in the Fund's bylaws or approved by its Board.

2. Funds and assets allocated to the Fund by the State.

3. Returns from investing the Fund's funds.

4. Fines arising from the Fund's operations and adjudicated according to this Law and its Executive Regulations.

5. Donations, endowments, and their proceeds, and loans and grants from domestic or foreign sources, according to applicable laws and procedures.

6. Fees for models and support application forms for low-income individuals, set by the Fund's Board at no more than one hundred Egyptian pounds per form.

7. Inquiry fees for low-income individuals, set by the Fund's Board at no more than three hundred Egyptian pounds per inquiry.

The Fund shall have an independent budget, with its fiscal year coinciding with the State's fiscal year. The Fund shall maintain special accounts at the Central Bank of Egypt where its resources are deposited, and balances shall be carried forward annually. The Fund's accounts shall be subject to supervision by the Ministry of Finance and the Central Audit Bureau.

Article (40)

The financier shall notify the investor at least twice a year of all data related to the financing agreement, as well as upon any modification to this data, according to what the Authority specifies.

Article (42)

In the event the Company violates any provisions of this Law or implementation decisions, loses a licensing condition, or engages in acts threatening market stability or shareholder/dealer interests, the Authority's Board of Directors may take one or more of the following measures:

(أ) Issue a warning to the Company to rectify the violation within the period and conditions specified in the warning.