This research paper addresses the legal, social, and economic issues associated with the old rental system and reviews its cumulative impacts on the parties to the rental relationship. It also presents a set of recommendations aimed at achieving a fair balance between the rights of landlords and tenants. The paper warns of potential threats posed by certain entities, such as real estate investment companies and active governmental bodies in the real estate sector, which seek to acquire buildings subject to this system, thereby threatening the rights and stability of residents and property owners.
Diwan Al-Omran published a paper titled “The Old Rental System: Legislative and Urban Challenges in Egypt” by researcher Ibrahim Ezz El-Din, which tackles one of the most complex real estate issues in the country, resulting from historical legal accumulations and overlaps that have complicated the relationship between landlords and tenants.
The paper offers a comprehensive review of the old rental system in Egypt and analyzes the legislative and urban challenges linked to it through the study of legal, economic, and urban issues stemming from the persistence of this system. It also examines its direct impact on the landlord–tenant relationship and the real estate market in general. The paper highlights the repercussions of these issues on the housing stability of middle- and low-income groups, alongside exploring the social and political dimensions related to the issue, such as the risk of forced eviction and the impact of government policies on urban transformation in Egypt.
The old rental system is considered one of the main pillars that has contributed to economic and social stability for around 1.6 million families in Egypt, by ensuring affordable housing for broad segments of the population. On the other hand, this system represents an economic burden for many landlords, who struggle to achieve a fair return on their properties due to frozen rental values for decades.
Despite its significant impact, the old rent file has remained stuck in the courts for years without clear legislative intervention to address the imbalance between the parties to the rental relationship. This stagnation has deepened the gap between old rental values and current market prices, opening the door for a third party—represented by real estate investors—to seek control over these units, especially those located in high-value areas.
In this context, the paper notes the political authority’s guidance to both the judiciary and the legislature. Although the case in which the Supreme Constitutional Court ruled two articles of the old rent laws unconstitutional had been before the courts for more than 26 years, the ruling was only issued after direct statements from the President of the Republic calling for the resolution of this file, followed by noticeable movement from the Egyptian Parliament. Diwan Al-Omran expressed concern about the short time frame granted to Parliament to address the matter, which may not allow for the preparation of balanced legislation that considers the interests of both parties to the rental relationship.
The paper also highlights the growing role of real estate investment companies and the New Urban Communities Authority in seeking to acquire large tracts of land and properties for resale and profit. Diwan Al-Omran warns of the risk that properties subject to the old rental system may become the next target for these entities if the landlord–tenant relationship is liberalized without clear safeguards to protect the right to adequate housing and ensure balanced contractual relations between the two parties.
In conclusion, the paper presents several recommendations at the housing, legislative, and landlord–tenant relationship levels. It calls for recalibrating housing policies in Egypt to ensure urban justice and residential stability for middle- and low-income groups, through effective regulation of the real estate market, adoption of tax policies that curb speculation, and directing investments toward social and affordable housing projects. It also advocates for the state to reclaim its role in housing production, moving away from a profit-oriented approach, and to regulate state–private sector relations via policies obligating developers to allocate a percentage of their projects for disadvantaged groups. This includes providing direct support to families through subsidized loans and rent-to-own programs.
On the legislative level, Diwan Al-Omran stresses the need to review urban development laws to ensure their consistency with social justice principles, define forced eviction legally in alignment with international standards, and provide fair alternatives and compensation. It also calls for strengthening legal oversight mechanisms and ensuring the participation of affected communities in the formulation of housing-related policies and legislation.
Regarding the landlord–tenant relationship, Diwan Al-Omran proposes adopting a gradual rent increase mechanism that reflects inflation rates or tenants’ actual income, ending the inheritance of rental contracts except for the spouse and for a limited transitional period. It calls for an inventory of vacant units under the old rental system and their gradual release through fair mechanisms, alongside imposing strict limits on eviction or termination of contracts in occupied properties without providing suitable alternative housing. It stresses the state’s responsibility to support affected parties on both sides through establishing a rental value support fund and offering tax exemptions for landlords, funded by the state and revenues from settlement of building violations. It also calls for protecting historic buildings from demolition or eviction, considering them public heritage, and imposing restrictions on the sale or transfer of ownership of old-rented properties during the transitional period to prevent speculation and acquisition by real estate investment companies or government bodies.
