Egypt's Draft Developers Law: Project Bank Accounts and a 5% Refund Reserve

Masari Team

If you are considering an off-plan purchase in Egypt, this matters to you. On Monday, October 12, 2026, Housing Minister Randa El-Menshawy outlined a draft law to regulate the real estate market and create a developers' union. The headline rules: a separate bank account for every project or phase, no advertising before ministerial approval, and a reserve equal to 5% of buyer payments to cover refunds. One caveat up front: this is still a draft. It has not been enacted and no date has been set.

What the minister announced

The remarks were made at a conference on regulating the real estate market and were reported the same day by Al Mal News and Cairo24, with Property Plus following up on October 14. According to these reports, the government is finalizing the draft, which builds on Prime Ministerial Decree No. 2184 of 2022 on rules for selling units in development projects.

  • Separate accounts: each project or phase gets its own bank account for revenues and expenses, so cash flows can be traced. Earlier coverage by Enterprise said the draft ties withdrawals to construction progress certified by a consultant and shields these funds from the developer's creditors.
  • No advertising before approval: units cannot be marketed before a ministerial decree approves the general and detailed plans for that phase. A new phase cannot be advertised until the developer is shown to be on schedule with the previous one.
  • Financial cover before sales: developers must hold 3% to 20% of a phase's construction cost, depending on project size, as cash, cheques from delivered projects, credit facilities or a bank guarantee. The requirement shrinks as work advances and is lifted at completion rates between 10% and 30%.
  • 5% refund reserve: 5% of total collections stays in each phase account to pay buyers who request refunds, and is released gradually as units are handed over.
  • Half-year reports: audited financial reports showing collections and spending per phase, due within 45 days of each half-year end.

Al Mal reports that the rules cover residential and tourism development, not construction contracting.

What is still open

There is no announced date for passage. Enterprise notes that developer classification is left to executive regulations, and that existing developers would get a grace period to comply once those regulations are issued. How the rules will treat projects already on sale has not been spelled out publicly.

What this means for buyers in New Damietta

Much of the supply in New Damietta, New Mansoura and the New Administrative Capital is sold off-plan on long installment plans. If the law passes in this form, buyers will gain clearer oversight tools. Until then, do not rely on protections that are not yet in force. A practical checklist:

  1. Ask whether a ministerial decree approved the plan for the phase you are buying in.
  2. Ask which account receives your installments, and whether it is dedicated to the project.
  3. Read the refund clause: conditions, deductions and timing.
  4. Compare the payment schedule with the construction timeline; heavy payments far ahead of progress deserve questions.
  5. Check whether the developer delivered previous phases on time.

Have a qualified lawyer review the contract before you sign, especially the delivery, refund and penalty clauses.

FAQ

Is the developers law in force?

No. Only the outline of a draft has been announced, with no confirmed timeline.

Does the 5% reserve protect me if I buy today?

Not legally. It is part of the draft. For now, your contract terms and the developer's track record are what protect you.

Does it apply to resale between individuals?

As reported, the rules target developers selling units in residential and tourism projects, not private resales.

Sources