Published on: Masr Connect

Introduction

The Egyptian House of Representatives has approved a package of substantial amendments to Old Rent Law No. 136 of 1981, aiming to liberalize the real estate market and regulate landlord-tenant relations after more than four decades of frozen rental values. These reforms come in response to a ruling by the Supreme Constitutional Court, which mandated an adjustment of the fixed legal rent and an update to the annual increase mechanism.

Legal and Historical Background

Since its enactment in 1981, the Old Rent Law has provided broad protection for tenants by fixing rental values without linking them to market dynamics. This created a growing gap between legal and market rental rates. A partial amendment in 1996 allowed for limited annual increases and terminated some contracts, yet most rental agreements remained unchanged. Recent years saw mounting calls for reform amid economic and social pressures, culminating in the Supreme Constitutional Court’s April 2025 ruling mandating a comprehensive adjustment of rent values and mechanisms.

Legislative Stages

Two draft amendments to the Old Rent Law were submitted to a joint parliamentary committee on April 29, 2025, by the government. The Housing Committee held extensive hearings between May 11 and 14, engaging landlords, tenants, and consumer protection organizations to discuss the transitional period and increase rates. The Committee Chair announced ongoing public consultations, including sessions with governors of densely rented regions.

Key Amendments

Rent Value Multiplied: Legal rent will be increased to 20 times its current value, with a minimum of EGP 1,000 for urban residential units and EGP 500 for rural areas.

Fixed Annual Increase: A 15% annual increase will apply to the new rent for five consecutive years from the law’s effective date.

Automatic Contract Termination: Old rent contracts will automatically terminate after five years unless both parties agree to renew under new terms.

Eviction and Compensation Mechanisms: Landlords can seek immediate eviction orders after contract expiration, with tenants entitled to fair compensation where applicable.

Alternative Housing Priority: Eligible tenants will be granted access to government housing alternatives, either for rent or purchase, based on criteria to be issued by the Prime Minister.

Non-Residential Units: Commercial and industrial units will have their rent raised to five times the previous legal value.

Reactions and Opinions

Government Position: The government emphasized balancing tenant protection with landlords’ right to recoup losses, affirming no eviction would proceed without alternative housing.

Political and Social Response: Some political parties and community voices opposed the steep increases and five-year transition, demanding a seven-year period and financial support for low-income tenants.

Landlords’ View: The Landlords’ Union welcomed the end of rent freezing, seeing the gradual increases as compensation for long-standing losses and an incentive for real estate investment.

Economic Experts: Analysts warned of increased housing costs for middle- and low-income families during the transition and called for targeted support and housing subsidies.

Economic and Social Impact

Preliminary studies suggest that increased rent values may generate liquidity for landlords and encourage renovation of aging properties, thus revitalizing the construction and real estate sectors. However, the 15% annual hikes may burden low-income families, prompting a need for housing support funds or subsidized tenant loans. Socially, a gradual shift in demographics is expected as some families move to more affordable or alternative housing, which could pressure the government’s public housing infrastructure.

Conclusion

The 2025 amendments to Egypt’s Old Rent Law mark a historic step toward modernizing the rental market by aligning rent values with market realities while introducing balanced protections for landlords and tenants. The success of these reforms depends on flexible implementation and the state’s ability to offer adequate housing alternatives and support vulnerable tenant groups during the five-year transition.