Saudi housing ministry plans centre to resolve housing disputes

Saudi Arabia plans to set up a centre to resolve disputes between tenants and landlords.

It comes as the kingdom steps up plans to regulate its housing sector as part of wide-reaching plans to reform the country’s property market.

According to the English language daily Saudi Gazette, the Saudi housing ministry plans to establish the Centre for Real Estate Dispute Redressal, which will try to find solutions through reconciliation between the parties involved to reduce pressure on courts. The new body is likely to work along similar lines to Dubai’s Rental Disputes Centre, the judicial arm of the Dubai Land Department, which was founded in 2013 to fast track rent disputes in the emirate.

According to the Saudi government’s own figures, 53 per cent of Saudi families live in rented accommodation and rent disputes there can take up to a year to be resolved.

The ministry also said that it would require property brokers to register with the national Ejar e-network so that it can better regulate the rental market. It said that registration would be open for up to three months and that brokers would be required to draw up standardised contracts between tenants and landlords.

The Ejar portal was set up by the government in June 2012 in an attempt to protect tenants from price manipulation in the market by allowing inspectors to scrutinise leases, but since then little has been heard of the system.

Abdul Rahman Al Samari, the head of the project, said the online portal would provide a database and platform where landlords, brokers and tenants can “meet and finalise deals”, the Saudi Gazette reported on Tuesday. He said the new system would “support the Saudis who are not able to pay rents”.

The news comes as Saudi Arabia continues to press ahead with ambitious plans led by deputy crown prince Mohammed bin Salman to reduce the country’s dependence on oil.

The 2020 National Transformational Program, released in April, envisages increasing the percentage of families owning their own homes to 52 per cent by 2020 from today’s 47 per cent.

To do this, the programme promises to reduce the cost of housing from what averages out to about 10 times gross salaries to just five times by 2020.

The Saudi Arabian cabinet has also approved this year the fine print of a controversial new tax on undeveloped land aimed at making it more expensive for owners of urban land to keep it empty to help ease the housing shortage.

A key part of the Saudi vision includes plans to boost the country’s undersupplied housing market by persuading property developers to build more.

“I am cautiously optimistic about the government’s new measures to boost the real estate industry,” said Aaron Browne, the director of sales and marketing at Sabban Group, a developer building a pair of high rise towers in Jeddah.

“Things are very different from the way they were two or three years ago. The government is talking the right language and opening the market up to the private sector.”

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