January 4th, 2024 General

WHAT TO EXPECT FROM THE NEW EGYPTIAN CONSTRUCTION VIOLATIONS CONCILIATION AND REGULARISATION LAW

Introduction:

A reading into Law no. 187 of 2023 promulgating the Construction Violations Reconciliation and Regularisation Law (the “New Law”) issued by the President of the Arab Republic of Egypt on 17 December 2023, reflects a state-wide direction in construction safety, regularisation, and maintenance of visual identity of Egypt’s unique and diverse architecture and construction methods, further solidifying the Egyptian government’s efforts to reduce, regularise, and fight various types of violations of construction-related laws and regulations.

Transitioning from the Old Law:

The New Law, now in effect (as of 18 December 2023) effectively repeals Law no.17 of 2019 regarding the Reconciliation of Some Construction Violations and its Regularisation (“Old Law”). Additionally, the New Law establishes domain over all conciliation and regularisation applications, and their challenges, that were submitted by applicants in accordance with the Old Law that were not reviewed, or their examination timeframes did not lapse, as the case may be, entrusting their review and examination to committees formed in accordance with the New Law. It is worth highlighting that such review of previous applications and challenges will still be subject to area pricing stipulated in the Old Law, and any hearing of any lawsuits related to the application’s principle violation and any judgments, decisions, or proceedings in relation thereto shall remain in halt until such applications and challenges are reviewed or examined.

The New Law further allows for applicants whose applications have been previously denied to challenge the decisions per the provisions of the New Law within thirty (30) days from the date of issuance of the New Law’s executive regulations, provided that the appeal period has not been lapsed under the Old Law.

Relevant Authorities, Purpose of the Law:

The New Law designates the governorates and other administrative bodies competent with planning and regulation as designated under article 4 Law no. 119 of 2008 (the “Egyptian Construction Law”), as the (”Competent Body(ies)”). Additionally, the New Law designates the governor or the head of the Competent Body, as the case may be, as the (“Competent Authority(ies)”), where both the Competent Bodies and the Competent Authorities are entrusted with the implementation of the New Law and decide on conciliation applications submitted under the New Law.

Practically, the Competent Authorities would undertake the implementation of the New Law through dedicated committees within the Competent Bodies (the “Competent Committee(s)”). By way of example, in Cairo Governorate, such Competent Committees are formed within the District Presidency, the administrative body overseeing property and construction regulations and compliance, for each of Cairo’s districts. Such Competent Committees should act as one or more technical committees to be established under article 5 of the New Law by the Competent Authorities as will be further clarified by the anticipated executive regulations.

While from a legal and practical standpoint, the Competent Committees are, in principal, responsible to implement the New Law, as part of such implementation, the New Law necessitates that the Competent Committees communicate with other administrative authorities involved in the conciliation process under the New Law to ensure the utmost compliance with the rules and regulations, in particular to the Egyptian code on structural fire protection.

Under the New Law, the Competent Authorities are authorised to conciliate and regularise any violations to construction-related laws in Egypt, provided that such violations are not violations to the structural safety of the construction in question.

What constitutes a Non-conciliable Violation under the New Law?

Furthermore, the law designates violations that are inherently non-conciliable, subject to observation of Water Resources and Irrigation Law no. 147 of 2021. These violations include[1]:

  • Violations to structural safety;
  • Building on lands that are subject to the provisions of Law no. 117 of 1983 (Antiques Protection Law) and Law no. 48 of 1982 (Protection of The Nile River from pollution); and
  • Change of usage of garages.
When will the Competent Committees commence its conciliation operations under the New Law?

As per the New Law and the current practice of the Competent Committees, it is not anticipated that any new applications for conciliation and regularisation or any challenges thereof will be accepted or reviewed anytime soon. This is due to the fact that New Law stipulates that conciliation applications should be submitted to the Competent Bodies within six (6) months from the date of the enactment of the executive regulations. Additionally, and per the practice of the Competent Committees, conciliation operations are on halt in anticipation of the executive regulations, save for applications reviewed and subject to finalisation per the Old Law. Moreover, this period may be extended to one or more similar periods that do not exceed three (3) years in total.

What to expect upon the approval of a conciliation application, causes of application rejection and their challenges timeframe under the New Law:

Where an application is reviewed by the Competent Committees, and is approved, the following shall take place:

  • The Competent Authority shall inform the applicant, through a registered letter or any other means stipulated in the executive regulations, of such approval;
  • The Competent Body shall inform the relevant utilities authority of the approval and regularisation within fifteen (15) days of its issuance, this step could also be undertaken by the applicant upon issuance of the decision;
  • Any lawsuit related to the violation subject to the approval shall abate, regardless on its status, and cessation of any ongoing or pending investigations thereof; and
  • The execution of any penalty related to the violation subject to the conciliation decision shall be stayed if any final judgment was issued thereof.

The conciliation application shall be denied by the Competent Authority, and shall be deemed to have never been filed, in the following cases:

  • The Competent Committees have rejected the application, and the deadlines to appeal the same have lapsed, or if the challenges committee affirms the Competent Committee’s decision to reject the application.
  • The applicant’s failure to pay the full amount for the reconciliation within sixty days (60) from the date of notifying the applicant of the Competent Committee’s approval of the application, in cases of immediate payment of the conciliation amount.
  • The applicant’s failure to pay two (2) instalments of the reconciliation amount.
  • There is a change or modification in the subject of the conciliation.
  • The documents or data related to the application are incorrect.

It should be noted that rejected conciliation applications could be challenged by submitting a challenge to such a decision to a specialised committee that is constituted within thirty (30) days of being informed of such a decision. This appeal committee shall decide upon any challenge submitted to it within sixty (60) days of its submission to the committee, and the applicant should be informed of such a decision through a registered letter or any other means stipulated in the executive regulations.

CONCLUSION:

Understanding and adhering to the New Law seems to be essential for the future of the Egyptian construction landscape. It is assessed that the visual identity and regularised construction efforts require the involvement of all stakeholders of the industry. Realising the vision of the New Law would not take place without the issuance of the executive regulations which should be issued by the Prime Minster within three (3) months from the New Law’s effective date, i.e. by 18 March 2024. The executive regulations are also anticipated to allow stakeholders (including contractors, developers, and property owners) to navigate this new landscape.

How can we help?

Our GLA Cairo office team would be delighted to assist in identifying whether the violation is conciliable or not and represent the clients before the governmental authorities to ensure a smooth and successful conciliation process.

[1] Article 3 of the New Law.

Authors: Maha El-Meihy, Legal Director, and Khaled Al Khashab, Associate.

For further information, please contact Alex Saleh (alex.saleh@glaco.com) and Maha El-Meihy (maha.elmeihy@glaco.com).