Highlights

President Abdel Fattah El-Sisi ratified Law No. 164 of 2025 (the “New Rental Law”) which introduces the long-anticipated reforms to Egypt’s rental framework, particularly the old lease contracts governed by Laws No. 49 of 1977 and No. 136 of 1981 (collectively, the “Old Rental Laws”). President also ratified Law No. 165 of 2025, which adds a new article to Law No. 4 of 1996 to enforce eviction procedures of the tenant in case of lapse of rental term under the lease contract.

The New Rental Law sets out timelines for the mandatory termination of old lease contracts that fall under the Old Rental Laws. It also provides a legal framework and basis for re-evaluating and adjusting the rental value of leased units during these timelines and introduces a mechanism for providing alternative units for the affected tenants.

The New Rental Law was introduced after extended social and parliamentary debate over Egypt’s outdated rental regime, which remained in force for decades and caused a significant disagreement between landlords and tenants. While the Old Rental Laws provided long-term housing stability to vulnerable tenants–such as elderly individuals and low-income families–by guaranteeing automatic lease extensions and imposing strict rental value control, landlords expressed concerns that the Old Rental Laws impeded their ability to recover possession of their properties or charge market-aligned rents, particularly in light of Egypt’s evolving economic conditions.

The enactment of the New Rental Law follows a landmark ruling by Egypt’s Supreme Constitutional Court on 9 November 2024, which declared the unconstitutionality of fixed rents for residential units under the Law No. 136 of 1981. The Court held that the rent control laws must be regarded as temporary and exceptional measures, which require continuous review to ensure balance between the interests of landlords and tenants. Moreover, the Court directed the Egyptian Parliament to take appropriate corrective measures.

Scope of Application

The New Rental Law applies to:

1. All residential units leased under the Old Rental Laws.
2. Non-residential units leased by natural persons under the Old Rental Laws.

It does not apply to any leased units that are not subject to Old Rental Laws (i.e. leased after 30 January 1996).

Entry into Force and Repeal

The New Rental Law was published in the Official Gazette on 4 August 2025 and entered into force on 5 August 2025 (the “Enforcement Date”).

The Old Rental Laws shall be repealed as of the day following the completion of seven (7) years from the Enforcement Date.

Timelines for Mandatory Termination of Lease Contracts

The following mandatory termination periods apply under the New Rental Law, unless mutually agreed between the parties:

• Residential leases: Terminate automatically upon the lapse of seven (7) years from the Enforcement Date.
• Non-residential units leased by natural persons: Terminate automatically upon the lapse of five (5) years from the Enforcement Date.

Survey Committees and Zonal Classification

Each governor shall establish survey committees to classify the zones within the governorate into premium, middle-class and economic zones, based on geographic location, construction level, rental value, infrastructure, and socio-economic criteria.

 Survey committees must complete the classification within three (3) months of the Enforcement Date, extendable once for a similar period by virtue of a decree from the Prime Minister.

Rent Adjustments

The New Rental Law sets out the following structure for rent adjustments:

i. Interim Rent:

From the first monthly rent due following the Enforcement Date, all tenants (or their successors) are required to pay a uniform monthly rent of EGP 250 (two hundred and fifty Egyptian pounds) regardless of the property class, until the survey committees finalise the zonal classification.

ii. Adjusted Rents (Post-Classification):

Once classification is completed, rents shall be increased as follows:

• Premium zones (residential units): 20x the current legal rent, with a minimum of EGP 1,000 (one thousand Egyptian pounds).
• Middle-class zones (residential units): 10x the current legal rent, with a minimum of EGP 400 (four hundred Egyptian pounds).
• Economic zones (residential units): 10x the current legal rent, with a minimum of EGP 250 (two hundred and fifty Egyptian pounds).
• Non-residential units leased by natural persons: 5x the current legal rent.

Tenants (or their successors) must pay any difference between the interim rent of EGP 250 (two hundred and fifty Egyptian pounds) and the adjusted rent in monthly instalments spread over a period equivalent to the period taken by the survey committees to complete the zonal classification process.

iii. Annual Increase:

All rental values shall be increased annually by 15% (fifteen per cent).

Eviction Rules

The tenants (or their successors) must vacate the leased units and return them to the landlords in the following cases:

1. Upon the lapse of the mandatory termination periods stipulated above, being seven (7) or five (5) years, as applicable.
2. The property is left unoccupied for more than one (1) year without justification.
3. The tenant owns another unit suitable for the same purpose of the leased property.

In case the tenant refuses to evacuate, the landlord may petition the Court of Summary Matters for an immediate eviction order, without prejudice to any compensation rights. The tenant may still file a substantive court action, which does not suspend the summary eviction order.

State Housing for Affected Tenants

To ensure protection for affected tenants and their successors, the New Rental Law gives them the right to apply for allocation of state-provided alternative units, either for rental or ownership, subject to the following:

1. Submitting an acknowledgement to vacate and return the current leased unit once the allocation decree is issued and alternative unit is received.
2. Priority is granted for allocation to tenants (or their successors), in line with specific priority criteria and other conditions to be set by the Cabinet.
3. Government must allocate alternative units to the original tenant and his/her spouse at least one (1) year before the termination of the lease contract.

Conclusion

The New Rental Law marks a significant step in the legal and economic relationship between landlords and tenants of units governed by the Old Rental Laws. It aims to gradually phase out the old rental regime by ending lease lifelong contract renewals to tenants and their successors and updating the outdated rental values. At the same time, the New Rental Law introduces transitional safeguards for tenants, including extended eviction periods and access to state-alternative units.

However, the scope and practical effectiveness of these protection measures are still to be observed, particularly from the tenants who used to pay minimal rents and may not have the financial means to rent or own the state’s alternative units at the current market prices.

This article is authored by Ragy Soliman, Managing Partner, Co-Head of M&A and Capital Markets, and Dr. Mohamed Fathy, Partner and Head of Real Estate, Tourism & Hospitality.