Bahaa Helmy Writes: The Occupants’ Union in the Grip of the Real Estate Developer

The courts are crowded with hundreds of disputes between unit owners and real estate developers over maintenance deposits, owners’ shares and the increasing additional financial burdens the developer imposes on them through the management and maintenance companies he sets up or contracts with for his own account and on his own terms, amid the negligence, poor security and bad maintenance to which owners and occupants are subjected by the real estate developer, who takes over the deposits, the management and the accounts to make additional investment returns and profits over and above the profits he made from selling these units, in a scene suggestive of tyranny.

We agree that the Unified Building Law and the occupants’ union system issued in 2008 did not address the question of owners’ right to manage their property through an occupants’ union in residential or tourist compounds enclosed by walls, because of deficient and overlapping definitions of the residential complex and the residential community.. etc., which led to the real estate developer tightening his grip on their management alone; it has even reached the point where some of them trade in utility prices to the owners at double the prices at which they buy those services from the utility companies, to reap more profits away from the eyes of the tax authority.

Many real estate developers boast of the shrewdness and inspired legal drafting of the contracts they conclude with owners to subject them to their terms and force them to submit, so as to prevent any of them from claiming any future rights to manage their property, to share in its management with the developer, or to audit the accounts and maintenance expenses paid to the developer.

It has recently been noticed that the Egyptian Businessmen’s Association has taken up the call to amend the occupants’ union law, with the participation of representatives of the Ministry of Housing and real estate investors, under the slogan of preserving real estate wealth.

They put forward some hoped-for legal amendments that serve their interests, such as expanding the powers and authority of the developer or real estate promoter – as they call themselves – aborting the idea of the occupants’ union altogether and preventing owners from taking part in following up maintenance work and expenses; and not content with that, they demand the power to collect the maintenance and services fee from owners by compulsion or to cut off water and utilities from them, the repeal of the legal provision giving the occupants’ union the right to set up a maintenance and management company, referring the chairmanship of the occupants’ union to the contracts those companies conclude with owners and occupants, allowing the real estate developer to invest the deposits and own commercial assets inside the residential community or compound, and demanding that the real estate developer continue for 20 years in the chairmanship and management of the occupants’ union as the most worthy and suitable for management, with the creation of special courts to settle occupants’ cases quickly. All of this is based on discrimination and the violation of the provisions of the Constitution.

At a time when officials of the Ministry of Housing state that these amendments have already been coordinated and agreed with members of the Housing Committee of the House of Representatives.

Here the question arises: if negotiation and agreement took place between officials of the Ministry of Housing and members of the Housing Committee of the House of Representatives, who are among the major investors in real estate and the management of residential compounds, villages and coastal resorts and who make millions from selling water to owners at prices exceeding 20 pounds per cubic metre through prepaid cards specific to their companies, then who is entrusted with defending the individual’s right of ownership and the occupants’ union system?

Why do we repeat the same methods and circumstances in which the occupants’ union law and system were issued in 2008, and submit to the pressure of some businessmen, which led to the issuance of a law containing many loopholes and shortcomings that paved the way for businessmen and real estate developers to slip through them?

We are certain that the Council of State will perform its constitutional role in reviewing and drafting bills in accordance with constitutional principles and the application of the principle of the rule of law.

To be continued, on what has become of another bill approved by the government amending Law No. 1 of 1973 on hotel and tourist establishments and villages, which was previously sent to the House of Representatives, and a second subject concerning the attempt to issue special legislation on a union of real estate developers in violation of the Constitution. So follow us.