In a giant leap forward and pivotal awaited move to reshape the Egyptian real estate market, President Abdel Fattah El Sisi ratified the new Rental Laws No. 164 & 165 of 2025 after a long-debated amendments to the Old Rental Laws that had been applied for decades.
Such new laws will affect millions of tenants and landlords in the Republic, construct a corner stone in their relationship through the imposed transitional periods, restructuring rental value increases and expediting the eviction procedures through implementing new mechanisms with the aim of ensuring a significant fair balance which is positively reflected on the country’s economic situation.
The new laws were issued to:
- Address the shortcomings of earlier laws; and
- Protect the rights of both tenants and landlords.
Key Takeaways
Laws Effective From: 5 August 2025:
- Law No. 164/2025 applies to premises leased for residential purposes as well as premises leased to natural persons for non-residential purposes.
- Law No. 165/2025 governs the contracts concluded after 31 January 1996. Such law added only a relevant article (i.e., 2 bis) to the law No. 4 of 1996. The main reason behind adding this article is expediting the eviction procedure after the end of the contract. It imposed an obligation on the tenant to vacate the unit by the end of the lease period, and in case of non-compliance, the landlord has the legitimate right to submit a request before the judge of interim matters in accordance with articles 194 – 200 and article 288 of the Civil and Commercial Procedure Law No. 13/1968 to issue an eviction order, without prejudice to the tenant’s right of filing a substantive lawsuit, which shall not suspend the eviction’s procedures.
Fixed Lease Periods:
- Residential Units: Seven years from the execution date.
- Non-Residential Units: Five years from the execution date.
- Contracts automatically terminate at the end of this period without renewal, unless both parties agree to extend. Tenants are obliged to vacate the unit by the end of this period.
- The rental relationship may be extended to the heirs of the original tenant during the said periods, provided that the heirs were permanently residing with the original tenant prior to the death. Tenants are not entitled to extend the contract after the expiration of the said periods.
Rental Value & Increases:
- Interim Rate: Set at a nominal EGP 250 per month, serving as a temporary value until city zoning classifications are established.
- Annual Increase: A fixed annual increase of 15%.
- Zoning: Properties will be classified into premium, middle-tier, and economic zones by a Cabinet Decree.
- Non-Residential Units: The rental value will be five times the current rental value with a steady rate annual increase of 15% and without determining any minimum.
Eviction:
- Landlords can seek eviction if the property has been closed for over a year without justification or if it is proven that tenant owns another unit which is suitable for the same purpose of the leased premises (i.e., residential/non-residential).
- The judge of interim matters issues an immediate order of eviction without prejudice to the tenant’s right of filing a substantive lawsuit, without suspending the eviction which shall under no circumstances suspend the interim eviction order.
Tenant’s Right to Alternative Unit:
- Tenant has the right to request an alternative unit from the State, either for rent or ownership prior to the expiration of the leasing period, subject to specific procedures.
Repealed Laws:
- Laws No. 49/1977, 136/1981 and 6/1997 shall be repealed, effective seven years after 5 August 2025.
Scope of Application
For decades, law No. 49 of 1977 and 136 of 1981 governed the relationship between landlords and tenants. In the same exact vein, the severe economic crisis in Egypt affected many landlords, who found the rental value did not correspond to living expenses or the actual value of comparable apartments.
Therefore, law No. 164/2025, in particular article (2), imposed a transitional period and explicitly determined a lease period to be seven years for residential leases and five years for non-residential leases, starting from the execution date. For more elaboration, contracts after the end of this period shall be automatically terminated by law unless the parties agree otherwise. Such article imposed a solid stone in resolving several obstacles before the court and clarified the nature of the contractual relationship between the parties.
With respect to the rental value, law No. 164/2025 explicitly elaborates in article (4) that the rent shall be twenty times the current legal rental value in the premium areas, with a minimum value of EGP 1000. Regarding the middle tier areas, the rental value shall be ten times the current legal rental value with a minimum of EGP 400 and EGP 250 for the economic areas, all of which shall be applied from the subsequent month of executing this law. Additionally, there will be an obligation on the tenant to pay to the landlord the difference between the minimum rental value imposed and the value determined by the committees formed by virtue of the Cabinet Decree No. 2789 of 2025. Regarding the non-residential units, the legislator determined the rental value to be five times the current rental value, without determining a minimum for the rental values. In furtherance, the law imposes a fixed annual increase for both residential and non-residential units to be 15% of the final rental value after the recalculation of the said committees.
Article (7) of the law No. 164 of 2025 combines and updates these specific reasons through adding two reasons for ending lease contracts: a) if it is evidenced that the unit was closed for over a year without a justification, or b) if it is evidenced that tenant owns other unit that serves the same purpose.
Due to the time of essence regarding the eviction procedures, the new law amended the eviction procedures by allowing the judge of interim matters to issue an immediate eviction order, without prejudice to the tenant’s right of filing a substantive lawsuit which shall not affect or suspend the eviction’s procedures.
In a solid stride from the legislator to protect the tenant’s housing rights, article (8) of the said law imposes an obligation on the State to give the priority to the tenants in designating a unit from the government, subject to specific procedures from the tenant. In other words, if the State announces the availability of residential or non-residential units, whether for rent or ownership, the tenant or lease successor shall have priority in obtaining a unit.
The new lease laws mark a significant cornerstone in establishing a clear vision for the relationship between the tenant and landlord, which lasted for decades. Additionally, such changes have a strong and direct impact on expediting the procedures before Egyptian Courts, along with resolving the disputes between the parties.
For any questions or inquiries, please feel free to contact:
Dr. Mohamed Shehata
Partner, Head of Litigation & TMT
Eslam Abdeldayem
Senior Associate