The Updated Regulation for Disposal of Municipal Real Estate






The regulation for disposal of municipal real estate has included a set of amendments that aim at providing a suitable legislative environment for investments. Such a step gives more flexibility for investors in tourism fields, whether they are owners of small-, medium- or big-sized enterprises. The regulation also covers seasonal investments and major investment projects. It is no doubt that diversifying investment of these lands that attract investors serves and enhances the investment in the tourism sector and helps achieve a better investment revenues, encourages attracting highly qualified investors and stimulates major companies to enter the market, which increases the level of offered services.

Mentioned below are some aspects of the amendments on the regulation that can play a role in stimulating investments in the tourism sector:
  1. Increasing the maximum duration for land leases for major projects from 25 to 50 years.
  2. Increasing the maximum duration for building leases whose investment contracts do not include establishing fixed buildings by investors to 10 years.
  3. Increasing the maximum duration for land leases whose investment contracts do not include establishing fixed buildings or conducting comprehensive renovations by investors to 25 years.
  4. Allowing temporary leasing on a daily, weekly or monthly basis or depending on occasion with a maximum duration of three months, where beneficiary sectors are entertainment, sports, coffee shops, restaurants and advertisement. 
  5. Allowing municipalities to sign partnerships with the private sector for establishing investment projects.
  6. The possibility for leasing through open and public competition for the highest price for some projects, in addition to the public competition that was into force in the past. 
  7. Increasing the exemption limit for the unpaid leasing period to 10 per cent up from 5 per cent of the contract duration for preparation or construction purposes. 
  8. Allowing municipalities to sign partnerships with the private sector for establishing investment projects.
  9. A bank guarantee with the offer with a value that at least equals 25 per cent of the value of the annual tender, instead of the whole year lease value that was into force in the past.
  10. Investing public gardens within two years of the date of accrediting the blueprint, instead of the five-year duration stipulated in the previous regulation.
  11. Allowing the temporary rent of vacant municipal real estates directly for durations up to three months through “Furas” (opportunities) platform to support seasonal activities.

For more information, you can have a firsthand look at the full text of the regulation through the following link: https://furas.momra.gov.sa/Executiveinstruction.pdf