As the expiration deadline for old lease contracts approaches for legal entities, interest amongst landlords and tenants alike has risen regarding when exactly these contracts will expire.
The Decisive Date
Old lease contracts are subject to the provisions of Law #10 of 2022, which regulates the rental relationship for legal entities, will expire in March 2027.
This law, ratified by the Egyptian President Abdel Fattah al-Sisi and published in the Official Gazette in March 2022, established a set of new regulations to govern the relationship between landlords and tenants in these contracts.
Five-Year Grace Period
The law grants “legal person” tenants a five-year transitional period, starting from its implementation date, with a 15 percent annual rent increase during this period.
At the end of the five years – specifically on March 2027 – existing leases subject to the law will expire, and the tenant will be obligated to return the leased property to its owner.
Who is subject to the law?
The term “legal persons” encompasses bodies and entities that own or lease properties under old lease agreements, including companies, associations, institutions, unions, ministries, and public authorities.
What Will Happen?
Upon the expiration of the legal grace period, the old lease agreement terminates, and the tenant is obligated to return the leased unit or property to the landlord.
However, if the tenant wishes to remain in the unit, both parties can agree on a new lease agreement, according to terms agreed upon between them.
The old contract therefore does not automatically continue after the grace period expires; rather, the continuation of the lease relationship is contingent upon the conclusion of a new contract between the parties.
Edited translation from Al-Masry Al-Youm
