CAIRO – For several decades, the tenant-landlord relationship failed to strike a balance that would guarantee justice for both parties, despite amendments introduced in piecemeal fashion. According to figures released by the Central Agency for Public Mobilisation and Statistics in 2006, some 2,617,411 families (about 10 million citizens) lease flats according to an old system, compared to 1,089,914 families that pay higher rents by virtue of limited-period contracts, a system commonly known as ‘new lease'. Back in the 1960s, the State interfered several times in favour of tenants, whereby rents were reduced in fulfillment of socialist reforms advocated by successive governments of the 1952 revolution, where social justice was one of its objectives. However, low rental value of flats discouraged the private sector from investing heavily in the real estate market. The alternative, however, was a shift to more lucrative formulas such as ownership, which turned out to be inconvenient for the wider public. In 1996, a New Lease law was issued, suggesting a limited period for rental contracts, which brought rents to a higher ceiling and gave landlords the right to renew contracts for another period with a 10 per cent increase. But this system caused a state of social instability for families that found themselves compelled to keep on the move. The disturbed equation in this vital sector has resulted in bizarre situations. For instance, as Hussein el-Gebali, head of the Housing Sector said, a four-story apartment block in a middle class area, could yield a monthly rent (under the old rental system) of as little as LE100, at a time when the plot of land which the building occupies is worth LEl0 million. Nabila Osman, heir to a five-story building with 20 flats, complained that she collected a mere monthly rent of LE110, which she divided among eight other heirs. “This amount is not even worth the trouble”, she told the Egyptian Gazette. A constitutional court ruling, issued in 1977, had actually straightened an imbalance out, where flats were literally inherited by the offspring of tenants. Under the old law, if a relative of a deceased tenant (up to the third degree) proved that they lived in the flat for at least one year prior to the death of the old tenant, the landlord was obliged to change the contract to the new tenant. But the ruling of article 29 of Law 49 was deemed unfair in the eyes of landlords, el-Gebali explained to Al-Gomhuriya Arabic daily. However, maintenance is still a black spot in the relationship between tenants and landlords, particularly when old rents are still way below soaring real estate prices and living standards in general, said Osman. While tenants traditionally expected landlords to bear maintenance costs, the latter have tended to abstain, due to high maintenance costs and low rental proceeds. El-Gebali referred to the Unified Building Bill 119 from 2008, which regulates maintenance via tenants' unions in each apartment block, sharing the costs. But the fact on the ground is somewhat different, according to complaints of many landlords. However, in the opinion of el-Gebali, if a balance were struck between supply and demand on the real estate market, the New Lease Law would have presented a suitable way out. He pointed out that the Government had to take means and ways into consideration which would attract the private sector to apartment blocks, where flats were leased rather than sold, because the State could not meet the demand single-handedly, as he stated.
