الهيئة العامة للرقابة المالية

• In cases involving an “Assignment of Rights,” both real estate developer and mortgage finance companies are required to notify the buyer of all assignment details.
• Mortgage finance companies must report clients’ outstanding debt balances monthly to “I-Score,” in accordance with credit reporting guidelines  established for banks and credit providers.

As part of its regulatory and supervisory mandate over non-banking financial activities, consumer protection and the investigation of filed complaints, Financial Regulatory Authority (FRA) has identified numerous instances where real estate clients failed to pay sufficient attention to key contractual terms—specifically those governing the “Assignment of Rights” to mortgage finance companies.

Financial Regulatory Authority (FRA) strongly urges buyers of real estate and residential units to thoroughly review all contractual terms before approving and signing purchase agreements—particularly in transactions where the purchase price is paid in debt installments over agreed timelines.

The Authority noted that most current real estate developer contracts contain provisions granting developers the right to execute a full contract assignment or assign underlying financial rights to a third party. Consequently, these rights may be transferred to a mortgage finance company, effectively converting the developer’s client into a customer of the mortgage lender.

FRA emphasizes that should a developer assign its rights to a mortgage finance institution, both the developer and the financing entity are legally obligated to inform the buyer of the assignment details and outline the revised payment mechanism for remaining property installments.

The Authority noted that such assignments operate under Article 305 of the Egyptian Civil Code, which stipulates:

“An assignment shall not be effective against the debtor or third parties unless accepted by the debtor or formally notified to them. Furthermore, for the assignment to be effective against third parties through debtor acceptance, such acceptance must bear a certified date.”

Furthermore, in compliance with directives from the Financial Regulatory Authority (FRA) and the Central Bank of Egypt (CBE) regarding credit position reporting across banks and financial institutions, mortgage finance companies—as licensed credit providers—must report their clients’ outstanding debit balances on a monthly basis to the Egyptian Credit Bureau (I-Score). Consequently, a buyer’s outstanding installment obligations will be reflected across all credit providers.