Executive Regulations Issued for La

On 8 July 2019, the Official Gazette published Prime Minister Decree No. 1631 of 2019[1] with the executive regulations of the law on the settlement of building violations. According to the law issued earlier this year, requests for settlement and reconciliation should be submitted within six months from the date of the issuance of the executive regulations, consideration for settlement could be paid on instalments up to three years, and only violations that took place prior to the issuance of the law are eligible for settlement.

Background

On 8 April 2019, Law 17 of 2019 on the Settlement of Building Violations (the “Law”)[2] was issued allowing for settlement in building violations. The Law provided for the establishment of a technical committee (“technical committee(s)”) in each of the relevant authorities listed in the 2008 Construction Law,[3] namely the New Urban Communities Authority, the Tourism Development Authority, the Industrial Development Authority, and the Armed Forces Engineering Authority. Technical committee members must not be employees of the defined authorities, and the committee must comprise a Ministry of Interior representative, a certified architect, a certified civil engineer, and is headed by a construction engineering consultant. Eligible requests for reconciliation must be submitted before a technical committee within six months from 9 July 2019 (i.e. prior to 8 January 2020). The submission of the request has the effect of suspending any active lawsuits or sentences, as well as administrative decisions/procedures issued concerning the violation(s) in question. A technical committee must issue its report within four months from the date of submission of a complete request, and is obliged to inspect all requests submitted before it within the six months period. The Law excludes the following from eligibility for settlement:

1. construction on state-owned land.
2. construction that infringes on the structural safety of a building.
3. construction that infringes on antiquities land, or the Nile.
4. breaches to special architectural style buildings.
5. exceeding aviation or military height restrictions.
6. changing the use of zones for which official plans have been issued by an administrative authority.
7. infringing on approved organizational boundaries, or the legal rights of neighbouring constructions.
8. building outside of approved urban boundaries (with three exceptions).

The Law also provides for committees to be established on the governorate level to preset settlement value according to the price per meter in each area (“governorate committee(s)”). These governorate committees are comprised of two representatives of the [aforementioned] relevant authorities, two real estate valuators certified by the Financial Regulatory Authority, and a Ministry of Finance representative. The role of the governorate committees is to thus set the price of the meter in the area, whereas the technical committees inspect the documentation and conduct filed visits, then determine the consideration for settlement based on the price per meter that was set by the governorate committee. The Governor, or head of the relevant authority, must then accept the request for settlement based on the approval of the technical committee, and payment of the determined settlement amount. Money collected from these settlements is deposited in the State’s Treasury, given that 25% of these yields go to development projects and the Social Housing Fund, 39% goes to infrastructure, sanitation, and clean water projects, and 1% goes to the remuneration of the members of the above committees, as well as the employees of the relevant authority. Rejected settlement requests can be appealed within 30 days from notice before a third committee of higher calibre.

The Executive Regulations (“ER”)

Coming into effect one day following its publication on 8 July, the ER provides further details on the formation of the committees provided in the Law and the calculation of the settlement amount. It also contains the template/form for the settlement request, and the information that must be enclosed therewith. Following the submission of the request, the ER provides that the administrative authority issues a certificate to the applicant indicating that they have filed a settlement request regarding their violation, which can then be used before court or other bodies to suspend the enforcement of negative decisions. In their determination of consideration for settlement, technical committees are bound by the following: The ER also adds to the provision in the Law which allows settlement consideration to be paid on instalments over three years, that an advance of 25% of the total value must be paid up front, and that the remaining value be paid on quarterly instalments with interest (according to CBE’s lending and discount rate).   [1] Prime Ministerial Decree No. 1631/2019 enacting the executive regulations of Law No. 17/2019 on the settlement of building violations, Official Gazette, Issue No. 27 (bis) (k), 8 July 2019. [2] Law No. 17/2019 on the settlement of building violations, Official Gazette, Issue No. 14 (bis) (c), 8 April 2019. [3] Law No. 119/2008 on Construction, Official Gazette, Issue No. 19 (bis) (A), 11 May 2008.