REGA reveals key provisions of Real Estate Expropriation Law

Saudi Arabia’s Real Estate General Authority (REGA) delineates the key provisions of the Law of Expropriation of Real Estate for Public Benefit and Temporary Taking of Property approved by the Cabinet this week.

By virtue of the law, expropriation entails the transfer of ownership from the property owner to the project owner, with compensation based on the market value plus a 20% allowance for damages. In some cases, in-kind compensation might be offered.

Temporary taking of property was defined as the use of a property for public interest for a specific period without transferring ownership. Owners are entitled to fair compensation equal to market rent plus an annual 20% allowance, in addition to damages, with properties returned after the need ends. The person whose property has been seized is entitled to the fair rent plus an annual fee of 20% of that value and compensation for damages arising from the temporary possession.

Public interest is anything that prevents public harm from disasters, epidemics, and the like, or that results in development or prosperity for the general public, where the interests of society are greater than those of any individual, group, or government. This covers development, infrastructure, utilities, mosques, schools, health facilities, transport projects, energy, water, electricity, gas, telecoms, mining, environmental and heritage preservation, as well as internal security and military facilities. It also includes projects tied to the Two Holy Mosques and pilgrim services, in addition to any initiatives designated by law or by Cabinet decision.

The authority said temporary seizure cannot exceed three years, with a one-time extension of up to three years subject to approval by the expropriation committee and the property owner. Non-owners affected by expropriation or temporary seizure may also seek compensation. If the need for expropriation ceases before or after the process, the project owner must notify the authority within 90 days, and procedures are halted if owners have not yet been formally served.

Key updates include compensation set at market value or rent plus a 20% allowance, with damages also covered. Property valuations will be conducted independently by three certified appraisers. Additionally, a specialized committee will analyze the findings of the appraisers to ensure compliance with standards. The new framework also sets strict timelines to guarantee compensation is paid within the specified period.