The British government is warning expats and property investors buying homes in Egypt to watch out for fraudsters and dodgy dealings.
The Foreign & Commonwealth Office (FCO) has published a lengthy guide to buying a home in Egypt.
The guide explains that estate agents are not regulated in Egypt, so no form of redress is available other than the courts if a property deal goes wrong.
The FCO highlights that estate agents, lawyers and developers often collude and that the authorities may have them under investigation without making their involvement public.
“Our advice is always to find an independent lawyer, preferably on the recommendation of someone you know and trust who has completed a property purchase through them,” said the FCO.
Do’s and Don’ts for buyers
“Definitely do not sign any papers or pay any money until you have someone in place you can trust to act for you.”
The guidance from the FCO suggests:
- Agree fees and the likely cost of purchase before instructing a lawyer – and get the figures in writing
- Don’t use lawyers or translators recommended by estate agents or developers. The FCO says many buyers have problems over their title to properties because of issues with translations and documents signed on recommendation
- Ask the British Embassy in Cairo for a list of English speaking lawyers and translators
- Don’t forget contracts are not legally binding if they are not bilingual
- Make sure your lawyer has thoroughly checked out title and any obligations to third parties listed in the deeds
- Never pay cash – always pay bills through a bank or on bank premises with a witness
- Egyptian law does not let a foreigner own a property directly – they have to form a company and the company buys the property. You will also need a residence permit
- Watch out for family disputes over unregistered property. Foreigners can often only own two properties in some parts of the country and special rules apply to the Sinai.
Other special issues to watch for are mortgages – few properties have mortgages in Egypt and if developers offer loans, check the terms carefully as they may not be regulated to offer financial advice.
Local and state property taxes are due, so make sure they are paid up to date by the seller.
Buyers pay a 2.5% of the property value as a tax similar to stamp duty on purchase, so make sure you have the money set aside.