Saudi Arabia’s State Properties General Authority said that the state’s real estate rental law and its implementing regulations will enter into force, starting next Thursday, February 2, according to a statement.
This was after approving the law and the passage of 180 days since its publication in the official Umm Al-Qura newspaper, as well as the approval of its executive regulations by the authority’s board of directors.
The authority also stated that the new law and its implementing regulations replace the State Rental and Evacuation of Real Estate Law and its implementing regulations, and aim to regulate the process of state leasing real estate through government agencies according to its needs, as well as rationalizing the financial costs of renting.
This is in addition to developing the exploitation of rented real estate by government agencies, strengthening the principles of governance, establishing the principles of transparency and efficiency in government rental of real estate, as well as unifying the authority supervising the rental process.
Furthermore, the law targets ministries, public authorities and institutions and the like, in addition to the owner of the property or whoever has the right to lease it legally.
It will also have a lot of positive effects on the investment sector in the real estate market, which will increase the contribution of the real estate sector to the Kingdom's gross domestic product.
The authority stated that the new law and the executive regulations provided more flexibility in determining the duration of lease contracts that reach five years, subject to renewal, and up to 25 years, subject to the approval of the authority. It allows a duration of 50 years for real estate built on government land that the authority contracts with investors for investment projects.
The law also authorized the government agency to complete the contract using the lease-to-own method after obtaining the approval of both the authority and the Ministry of Finance.
The articles of the law specified the mechanism for requesting government agencies to rent a property, as well as the conditions of the lease, the terms of its contract, and the mechanism for its extension, in addition to cases of compensating the landlord when evacuating the property, and the way of restricting the damages if any.
The articles also include the mechanism for handing over the property after the end of the contract, and how to handle any dispute that arises between the landlord and the renting government agency.