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Executive Regulations for Building

Executive Regulations for Building Law are Issued: The Regulations are the Most Significant Legislative Development this Year in Terms of Investment Facilitation: How the New Amendment will Affect Business and Investment
The Issuance of the New Regulations
In the middle of last year (May 2008), Parliament issued the new Building Law Number 119 of 2008, which required that its Executive Regulations be issued within the following six months. Accordingly, the Minister of Housing issued such Regulations in the beginning of last month, and they were published in the Egyptian Gazette as Decree Number 144 of 2009 on April 8th, 2009. In spite of the fact that the Regulations have come later than anticipated, and that they merely articulate provisions already stated in the Housing Law a year before, nevertheless they should be considered a real breakthrough in Egyptian investment legislation because they finally allow the implementation of the new Law and the activation of new legal rules that are a true turning point in the efforts to improve the investment environment.
The Key Ideas in the Regulations
These regulations are by their very nature technical, and therefore shall not be described in this legal review. Accordingly, following are key ideas covered by the regulations which may convey the effect it will have on the business environment:
  • The Regulations provide, once and for all and in a clear and transparent manner, the conditions and procedures for obtaining building licenses, and determines building requirements in a manner which should restrict significantly the discretionary powers of government bureaucrats in issuing such licenses. (In addition such useful provisions are added, including the minimum size of a bedroom, and the requirement that all commercial establishments have toilets!).
  • As regards the procedures for issuing building licenses, the most significant of them is that the applicant for a building license will present his/her application to the competent administration accompanied by certain basic and specific documents, including the drawings made on the basis of previously published conditions and specifications, and certified by a engineering consultant.
This private sector consultant is responsible for the soundness of the drawings and replaces the whole previous system whereby the drawings were to be reviewed and approved by engineers from the state administration. Moreover, the competent administration has to accept the application or reject it within thirty days of submission, otherwise the application would be considered accepted by operation of law.
  • The Executive Regulations further provide the system for certifying engineering consultants who shall be authorized to submit drawings.
  • The Regulations also provide a new basis for the operation of Unions of Building Occupants, which should improve their capacity to manage and maintain housing units and buildings.
  • Finally; the Regulations provide the executive rules for the operation of the Higher Council for Planning and Urban Development which allows the implementation of a world-class legal framework with respect to modern urban planning.
Conclusion
The Executive Regulations of the Building Law are the most significant development this year in the domain of investment climate improvement because they deal with one of the most pressing issues in the doing business climate, which is the building license. It is worth noting in this respect that among the various doing business indicators issued by the World Bank in its annual bench marking report, Egypt’s ranking in obtaining a building license was one of the worst worldwide, in addition to the fact that this has consistently been a major source of complaint by Egyptian investors. The regulations are perhaps over-ambitious in setting out best-practice terms and conditions which may prove difficult to apply. But even if they are applied partially or gradually, they will make a real difference in the way that investment is conducted and in making life easier for all.
The Issuance of the New Regulations
In the middle of last year (May 2008), Parliament issued the new Building Law Number 119 of 2008, which required that its Executive Regulations be issued within the following six months. Accordingly, the Minister of Housing issued such Regulations in the beginning of last month, and they were published in the Egyptian Gazette as Decree Number 144 of 2009 on April 8th, 2009. In spite of the fact that the Regulations have come later than anticipated, and that they merely articulate provisions already stated in the Housing Law a year before, nevertheless they should be considered a real breakthrough in Egyptian investment legislation because they finally allow the implementation of the new Law and the activation of new legal rules that are a true turning point in the efforts to improve the investment environment.
The Key Ideas in the Regulations
These regulations are by their very nature technical, and therefore shall not be described in this legal review. Accordingly, following are key ideas covered by the regulations which may convey the effect it will have on the business environment:
  • The Regulations provide, once and for all and in a clear and transparent manner, the conditions and procedures for obtaining building licenses, and determines building requirements in a manner which should restrict significantly the discretionary powers of government bureaucrats in issuing such licenses. (In addition such useful provisions are added, including the minimum size of a bedroom, and the requirement that all commercial establishments have toilets!).
  • As regards the procedures for issuing building licenses, the most significant of them is that the applicant for a building license will present his/her application to the competent administration accompanied by certain basic and specific documents, including the drawings made on the basis of previously published conditions and specifications, and certified by a engineering consultant.
This private sector consultant is responsible for the soundness of the drawings and replaces the whole previous system whereby the drawings were to be reviewed and approved by engineers from the state administration. Moreover, the competent administration has to accept the application or reject it within thirty days of submission, otherwise the application would be considered accepted by operation of law.
  • The Executive Regulations further provide the system for certifying engineering consultants who shall be authorized to submit drawings.
  • The Regulations also provide a new basis for the operation of Unions of Building Occupants, which should improve their capacity to manage and maintain housing units and buildings.
  • Finally; the Regulations provide the executive rules for the operation of the Higher Council for Planning and Urban Development which allows the implementation of a world-class legal framework with respect to modern urban planning.
Conclusion
The Executive Regulations of the Building Law are the most significant development this year in the domain of investment climate improvement because they deal with one of the most pressing issues in the doing business climate, which is the building license. It is worth noting in this respect that among the various doing business indicators issued by the World Bank in its annual bench marking report, Egypt’s ranking in obtaining a building license was one of the worst worldwide, in addition to the fact that this has consistently been a major source of complaint by Egyptian investors. The regulations are perhaps over-ambitious in setting out best-practice terms and conditions which may prove difficult to apply. But even if they are applied partially or gradually, they will make a real difference in the way that investment is conducted and in making life easier for all.