Authenticating Transaction

Transaction needs to be authenticated according to Egyptian law. Original authentication which is full recognized by law is 'registration'. Registration is the legal way the law has defined as sole instrument to transfer ownership. Registration is the process done at the notary public, and to reach this process one of two paths shall be used:

  1. Consensual Registration:

Where the Seller and Buyer agree to be present either by themselves or by legal representatives in the notary public to show the titles of deed and declare their wish clearly to transfer the ownership. Eventually the sale contract gets stamped by the notary public stamp and the state stamp, and registration is proven on the margin of the contract.

 

  1. Court Registration:

In this case it is presumable that the Seller is either unavailable or reluctant to cooperate. The buyer resorts to the court and their solicitor establishes what is known as "Contract Validity" legal suit against the Seller. The approving verdict resulted from this suit allows the Purchaser to utilize it in the notary public and register the sale contract.

 

Registration, however, is not always available. Many people among Egypt's real estate history have chosen not to register their properties. Reason is that registration used to be an expensive process, especially when the notary public office used to charge 3% of the property's purchase price as registration fee. Egypt, consequently, had updated its registration system in order to encourage owners to register their properties, substituting the old system with a new one that estimates registration fee according to the area of the property subject-matter of transaction. The maximum fee, according to the new system, shall not exceed EGP 2000, regardless of the purchase price's value.

 

The abovementioned was merely a quick illustration on the theoretical method of proving ownership of a property. Practice, however, was proven to work in a different way than the theoretical method.

  1. Signature Validity:

Signature validity is the most common method used for authenticating real estate sale transactions all over Egypt. It must be mentioned that signature validity is not registration, and that it's weaker in protection than registration.

 

This court case has obtained its significance in the Egyptian society due to the fact that it prevents contract denial. Contract denial occurs when a contractual party denies the fact that they have concluded a contract with the other party, purposing to escape the legal consequences, while signature validity court verdict is significant evidence that the signature on the contract belongs actually to that other party. This leads to the termination of the possibility of them denying the very contract between them and the other party in the future.

 

Signature validity is the common form of protection used with foreigners purchasing a property in Egypt.

 

Zeiad Yehia
Solicitor


 

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