Prohibition from practicing the activity.. Penalty for violations of real estate finance companies

The Real Estate Finance Law approved several penalties for violating companies, the most prominent of which came in warning and preventing them from practicing the activity, in order to achieve market stability and protect the rights of those dealing with the company, or in the event that the company is exposed to financial conditions that affect its financial position.

Article 42 of the law stipulates that the Authority’s Board of Directors, in the event that the company violates any of the provisions of this law or the decisions issued in implementation thereof, or if it loses one of the licensing conditions, or if it does something that threatens the stability of the market or the interests of its shareholders or those who deal with it, to take a measure or more of the following measures:

(a) Sending a warning to the company to remove the violation within the period and according to the conditions specified in the warning.

(b) Requesting the chairman of its board of directors to invite the board or the general assembly to convene to consider the matter of the violations attributed to it and to take the necessary measures to remove it.

(c) Dissolving the company's board of directors and appointing a delegate to manage it until a new board is appointed by the prescribed legal instrument.

(d) Prohibition from practicing all or some of the licensed activities for a specified period, or preventing dealing with new clients.

(e) Revocation of the license to practice some or all of the licensed activities.

 On the other hand, there are 4 obligations on the beneficiaries of the housing units in accordance with the real estate finance law:

The real estate finance law specified a number of obligations on the beneficiaries of housing units, and the law prohibited the disposal of housing units before the lapse of a certain period specified by the law.

Article 36 bis stipulates that whoever benefits from a housing unit subsidized by the Mortgage Finance Guarantee and Support Fund is obligated to use it for his and his family’s residence, and it is prohibited to dispose of it or deal with it in any manner of disposals and transactions before the lapse of seven years from the date of the rights to support or obtaining the approval of the fund.

Any disposition of the aforementioned subsidized units that takes place in violation of the provisions of this law and the decisions issued for its implementation is null and void, and it is prohibited for the Real Estate Publication and Documentation Authority - without the approval of the Fund - to publicize, register, in-kind registration, attest or prove the history of the dispositions, or make powers of attorney or assignments or make Any transactions on these subsidized units except for registering the unit in the name of the investor and registering the mortgage or concession right in favor of the real estate financing agencies. (4)(6).

According to the law, the financier may require the investor to insure in favor of the financier the value of his rights with an Egyptian insurance company against the risks of non-payment due to the death or disability of the investor, and the implementing regulations specify the rules and conditions for this insurance.