The Occupants Union vs Developer Management has been a dilemma across the real estate market in Egypt in recent years. Property owners face numerous challenges when it comes to the management of their residential units. Invest-Gate tours the capital for insights on the impeding union vs private management issue, seeking solutions and sharing opinions ahead its next strategic roundtable on the matter on June 14.

 

So who prefers what and why is what this piece is all about. Through Invest-Gate surveys, results point out to approximately 82% of our participants prefer developer (private) management for their residential units in spite of the new occupants union law and regulations coming up.

 

Before we dig deeper into the issue, it is important to clarify that the occupants’ union is a board of directors, elected by residents, to set up obligations, duties, and the rights of the occupants. The tasks of the Occupants Union are focused on maintaining the safety and maintenance of the property and providing the services required for it.

Occupants Union Responsibilities

  • management
  • maintenance
  • & guarding of the unit

The union usually has a period of three years before electing a new one. However, the annual general assembly can withdraw confidence and re-elect a new board if 25% of the owners approved that.

These are the same responsibilities that the main project developers can do nevertheless, there is a disagreement between the union and the developers at managing the maintenance revenues, which residents pay annually. At the same time, as the Invest-Gate survey reveal, most residents prefer to keep the main developer of the project to manage their units due to the problems that they usually face with the maintenance and the amount of money they pay. 

Developers: A Better Management?

Not only, do residents prefer the developers (private) management instead of the union, but also some real estate market experts way on this. Tamer Safi El din, real estate expert, sees that the developer is indeed better than the union “as the developer will take good care of its investment while the union consists of volunteers, who lack how to take urgent decisions or to manage such facilities,” he comments.

Likewise, Eng. Mohamed Halim, urban planning expert, says that there are always problems with the occupants’ union “while you can’t see these kinds of obstacles with the developers, but the only challenge with the developers is the affordability as the residents pay too much money,” he comments. “I believe the developer management is much better if the amount of the money is not so high,” he affirms.

Occupants Union Under the Law

With the ongoing dilemma of the occupants’ union and the endless disagreement with the developers. The government has developed a law to organize such unions. According to the new Unified Building Law (currently under discussion), the occupants have to pay a monthly payment for maintenance. “Every occupant, who fails to pay, shall be punished with a monthly fine not less than EGP 10 and not exceeding EGP 100,” as reported by the law requirements.

Moreover, according to the Building Law, occupants unions ‘are for properties not less than five units, or residential complexes, whether all or some of them are residential or non-residential, owned or rented. It is also permissible to establish a union that includes more than one building.

Relying on experts for management weighs in more than volunteer work of regular owners or occupants as our initial studies indicate. On that occasion, Invest-Gate invites you to attend its next strategic roundtable “Occupants Union Law: Recommendations To Save Our Real Estate Wealth” taking place virtually on June 14 in collaboration with the Egyptian Businessmen Association (EBA).

Free registration at “Occupants Union Law: Recommendations To Save Our Real Estate Wealth”