President Abdel Fattah Al-Sisi issued a decree amending some provisions of Law No.

 

120/1982 regulating Commercial Agency and some of Commercial Mediation

 

 

business.

 

Overview

 

 

 

Law no.: 21 of 2022 amending some provisions of Law no.120 of 1982 regulating

 

Commercial Agency and some of Commercial Mediation business.

 

 

 

Highlights

 

 

Recently, a significant amendment was adopted regarding the law regulating Commercial

 

Agency and Commercial Mediation (the “Law”). The amendment has two primary purposes:

 

firstly, it regulates expressively, and for the first time, the real estate brokerage activities by

 

creating an electronic register and providing several vital obligations to be fulfilled by agents

 

in this field. Secondly, the amendment aims to increase penalties, initially stipulated by the

 

original law adopted in 1982, regarding commercial agency, commercial mediation, and real

 

estate brokerage registration requirements.

 

 

 

Concerned Entities

 

 

The Law provisions apply to:

 

 

Commercial agents;

 

 

Commercial mediators; and

 

 

Real estate brokers/agents.

 

 

 

It is worth noting that the Law applies whether natural or legal persons are engaged in

 

 

these activities.

 

 

Important Amendments

 

 

The Law introduces the following new concepts:

 

 

A special e-Register, namely “The Real Estate Brokerage Register,” was created to register

 

real estate agents/brokers, including their data, code, category, and required information

 

and statistics to regulate real estate activities.

 

 

 

The Law creates “negative lists,” including terrorist entities and entities enlisted in the Anti-

 

Money Laundry Special Unit database, who cannot register as real estate brokers.

 

 

The essential requirements needed to register as a real estate broker were stipulated as

 

follows:

 

For natural persons: a list of requirements needs to be fulfilled besides passing

 

a specialized training course in the Real Estate Agency field following executive decisions to

 

be issued soon.

 

 

For legal persons:

 

 

The applying company headquarter must be in Egypt. In addition, the competent minister

 

can authorize the enrollment of companies based in Egypt;

 

 

The real estate brokerage must be included in the company’s status as one of its activities;

 

 

The company’s paid-in capital must be no less than EGP 20,000 at the time of enrolling in

 

such e-register; and

 

 

Partners, directors, board of directors members or persons engaging in the company’s

 

management must fulfil several conditions and requirements in this regard.

 

 

The Law also creates new obligations to be followed by registered real estate brokers as

 

follows:

 

 

The broker/agent shall hold a register including all brokerage transactions, received

 

commissions, price/date/down payment of each transaction, personal data of parties, and

 

any other required information to be determined by future executive decisions.

 

 

Moreover, the broker/agent shall fulfil verifications and data privacy obligations regarding

 

each transaction.

 

 

Regarding the real estate agency contract, it must include a list of required data such as:

 

Contract date;

 

 

Broker and clients names and ID numbers;

 

 

Real estate agent data and tax registration number;

 

 

Unit description, and any other required data by future executive ministerial decisions; and

 

 

Payment references, including its method, type, date, and amount.

 

 

The commission in the real estate agency contract and any other received amount shall be

 

paid by cashless payment methods regulated by law no.18 of 2019. Otherwise, the agent

 

would be subject to a fine of 2% - 10% of the total cash received with a maximum of EGP 1

 

million.

 

 

Penalties and Conciliation

 

 

On the one hand, the Law significantly increased the penalties once stipulated in the

 

original text adopted in 1982 to be adequate to the actual context, as follows:

 

 

The Law stipulates a maximum of 2 years imprisonment and/or a fine of EGP 50,000 – EGP

 

2 million, besides facility closure and banning from engaging in such activity for a period of

 

two years, in case of:

 

 

Practising commercial agency, engaging with a commercial mediation or real estate

 

brokerage activities without registration on the special register;

 

 

Establishing or managing a facility created for the activities mentioned above without

 

registration;

 

 

Registering on the commercial agency and mediation register or real estate brokerage

 

register upon incorrect data mentioned intentionally, or upon blocking and hiding required

 

data, information, registers, or documents.

 

 

A fine of EGP 30,000 - EGP 50,000 and registering cancellation if the real estate agent did

 

not mention any introduced edits or amendments on the required data for registration to the

 

competent authority within 30 days of such edit.

 

 

Moreover, a fine of EGP 50,000 and/or six months of imprisonment if intentionally practicing

 

such activities after dismissing one of the required conditions for the registration.

 

 

Finally, the effective manager of the legal person shall endure the same penalties following

 

conditions stipulated by the Law.

 

 

On the other hand, reconciliation is also an option for the competent minister in case of

 

criminal proceedings engaged for the mentioned violations, following conditions and fine

 

payments provided in detail by the Law.