Cancelling an Off-Plan Apartment Contract in Egypt: Termination Penalties Explained
If you need to cancel a contract for an off-plan apartment in Egypt, you may get back far less than you paid. The reason is usually the termination clause, which sets how much the developer keeps when the contract ends early. The short answer: read that clause before you sign, check whether the percentage is taken from the total unit price or only from what you have paid, and compare it with the clause on compensation for late delivery.
This guide draws on a September 2026 study, reported by Al Banker and Masrawy, in which a legal team reviewed more than 40 developer contracts across Egypt. It explains the clauses; it is not legal advice, and a lawyer should review your own contract.
What the contract study found
- The share a developer keeps on termination rose in model contracts from 10% to 15%, then 20%, and up to 30% of the total unit price in some newer contracts.
- Compensation to buyers for late delivery fell from 1.5% a year to 0.5% and then 0.25%, with a total cap of 2% of the unit price.
- For a EGP 20 million unit, a buyer could lose up to EGP 6 million on termination, while maximum delay compensation would be EGP 400,000.
- Some non-refundable booking amounts reached EGP 250,000, and some buyers did not receive the contract before signing.
Why the calculation base matters
A hypothetical example: a EGP 1.5 million apartment on which you have paid EGP 300,000.
| Clause wording | Deducted | You get back |
|---|---|---|
| 10% of amounts paid | EGP 30,000 | EGP 270,000 |
| 10% of total price | EGP 150,000 | EGP 150,000 |
| 20% of total price | EGP 300,000 | Almost nothing |
In the early years of an installment plan, a single phrase can turn a modest loss into losing everything you paid.
Questions to ask before signing
- What is the termination deduction, and is it based on the total price or the amount paid?
- Is it different if termination is caused by the developer's own delay?
- How soon are refunds paid, and in one payment or installments?
- How many missed installments allow the developer to terminate, and must they warn you in writing first?
- Can you transfer the unit to another buyer instead of terminating?
- What is the delay compensation, and is it capped?
Reducing the risk
Ask for the full contract early and have a lawyer read it. Put every verbal promise in writing, ideally in a signed annex. Choose an installment plan based on stable income, with an emergency reserve, since most terminations start with missed payments. If you need to exit, compare termination with selling your contract through a transfer, which may cost less even after transfer fees.
Checklist
- Confirm the deduction percentage and its base.
- Confirm the refund timeline and method.
- Review when the developer can terminate for late payment.
- Compare the termination clause with the delay compensation clause.
- Check what happens to the booking amount.
- Look for a transfer clause as an alternative.
- Have a specialised lawyer review the contract.
FAQ
Can a developer keep part of my money if I cancel?
The contract usually governs this; the study found deductions of 10% to 30% of the unit price. Whether a clause can be challenged is a legal question for a lawyer.
Can I negotiate the termination clause?
Sometimes. Ask for a lower rate or for it to be based on amounts paid, and record any agreement in a signed annex.
Are new government rules coming?
Masrawy reported that the government asked developers to comment on a draft real estate market law. Until binding rules are issued, your signed contract remains the main reference.
Sources
- Al Banker: Study finds gaps in real estate contracts (19 Sep 2026)
- Masrawy: Study says developer termination penalties reached 30% of unit price (17 Sep 2026)
On Masari you can compare unit prices, floor plans and payment plans before contacting any seller.