Saudi Gazette report
MADINAH — A state of confusion and discontent is prevailing among people living along Quba and Qurban streets in Madinah after authorities decided to postpone acquisition of land for the Darb Al-Sunnah Project and delayed disconnection of power from buildings.
Residents in the area were waiting for compensation to purchase or rent housing units near schools in other parts of the city. Some of them have already signed contracts with realtors and paid rents for six months, ranging between SR12,000 to SR22,000 per flat.
They now have to pay exorbitant prices ranging between SR24,000 to SR45,000 for a flat in the vacated buildings in the project side, showing 50 percent rise in prices. This led to conflicts between realtors and tenants and cancellation of contracts.
Residents accused the Finance Ministry for the problem as it did not take a final decision on acquisition of land and payment of compensation. They said higher authorities have ordered residents to vacate buildings in the project site between the Prophet’s Mosque and Quba Mosque.
Iyad Bafaqeeh, deputy chief of realtors and member of the real estate committee at Madinah Chamber of Commerce and Industry, said residents are unhappy over the ministry’s indecision on acquiring properties for the Darb Al-Sunnah project.
“The ministry was supposed to order disconnection of electricity power to buildings in the project site by the middle of the current Hijri month but it has indefinitely postponed the acquisition plan, drawing wrath and discontent of residents,” said Bafaqeeh.
After the ministry’s order to vacate the buildings, residents were racing against time to rent suitable flats near schools and mosques and many of them signed contracts and paid rents worth SR12,000 to SR22,000 for six months.
When the ministry postponed its acquirement decision, tenants wanted to cancel their contracts and demanded their money back from real estate owners.
“Realtors refused to pay back money and this resulted in a conflict between the two sides,” Bafaqeeh said. Some tenants had left their buildings early and moved their furniture to new buildings.
Realtors and investors are now demanding high rents for flats in the vacated buildings.
Bafaqeeh urged the Finance Ministry’s branch office in Madinah to end its silence and hold negotiations with residents of the area including tenants and realtors.
“It should also meet residents to disclose the real project plan and answer their queries. People are wondering whether the ministry has postponed or canceled the project and nobody has given them the correct answer,” he said.
The postponement has raised rents by 50 percent to SR30,000 and SR45,000, depending on the quality of buildings and number of rooms, he said.
He emphasized the need for good planning, transparency and construction of multistory buildings to prevent price hike.
Asked about possibility of paying back rents obtained from those who have vacated from their buildings, Bafaqeeh said: “It would not be possible as the buildings belonged to endowments of heirs and the amounts received will be distributed among the beneficiaries.”
He said the ministry of finance, which caused the problem, should pay the amounts to affected tenants.
