Okaz/Saudi Gazette

RIYADH — The State Properties General Authority (SPGA) has the authority to stop the rental procedures being carried out by any government entity before signing the contract in the event of any objections raised by the neighbors of the property provided that their reasons are valid and are in the public interest.

This provision is part of the draft executive regulations of the Rental Law, a copy of which was obtained by Okaz/Saudi Gazette, that await approval by the higher authorities. The regulations aim to regulate state rental operations through government agencies according to needs in a manner that takes into account the rationalization of financial costs and promotes developing the exploitation of real estate leased from government agencies.

The SPGA obligated 11 ministries to draw up the executive regulations of the Rental Law, and these ministries include finance, foreign affairs, health, sports, commerce, municipal and rural affairs and housing, justice, investment, education, energy, and industry and mineral resources. The objectives of the regulations include strengthening the principles of governance and establishing the principles of transparency and efficiency in the process of leasing real estate by government agencies. The regulations allowed the government agency wishing to rent a property that meets its needs from another government agency by direct agreement in accordance with the provisions of the law.

The regulations also approved, while renting a property, to carry out study of market prices in accordance with the prevailing prices, as well as the prices that were previously dealt with, in addition to the price references approved internally and externally, and any other criterion approved by the authority. The SPGA, its employees and all those who participated in the study or were familiar with it are obligated to keep the results of the study confidential.

According to the regulations, one or more committees shall be formed for concluding direct agreement; one or more committees to open bids, and one or more committees to examine bids.

The regulations grant the government entity to sub-lease the leased property to others, or to give it up to another government entity after the approval of the SPGA in accordance with five controls. These controls include the following: the lease period should not exceed the duration of the basic contract; the space to be leased or ceded should be more than the actual need for the government entity and in a manner that does not conflict with its future need for the real estate; the value of the sub-lease contract would be equal to the value of the basic contract - proportionately - in the event that the contract was concluded with another government agency; the area to be rented should not exceed 25 percent of the real estate area; and the government agency shall abide by the applicable legal provisions and procedures for leasing and investing state properties.

The executive regulations allow the SPGA, upon receiving requests from government agencies wishing to rent, to offer two or more government agencies to rent one property, provided that it would rationalize the financial costs of government agencies and develop the exploitation of the property to be rented without prejudice to the need of these entities for real estate and the nature of their work.

If the government agencies agree to rent one property, then the multiple rental requests shall be combined in one competition. In such cases, the number of government agencies wishing to use the property shall be mentioned in the competition documents and the letter of the intent.

The competition documents shall also clarify the names of government agencies, the nature of their activity, and the space to be allocated to each entity. On their part, each government entity shall conclude separate rental contracts in accordance with the provisions of the Rental Law and its executive regulations with the winning bidder.