Article 14 of the Saudi Endowments Authority Law
المادة 14 من نظام الهيئة العامة للأوقاف
The article allows the Authority a fee for managing endowments that have another supervisor, set by the Board after agreement with the endower or supervisor, at no more than 10% of the endowments' net annual income.
Official text (Arabic)
This article has not been amended since the law was issued.
تحصل الهيئة على مقابل أتعاب نظير إدارتها للأوقاف التي لها ناظرٌ غيرها وعُهد إليها إدارتها، ويحدد المجلس هذا المقابل بعد الاتفاق مع الواقف أو الناظر، على ألا تزيد نسبة المقابل على (10٪) من صافي الدخل السنوي لتلك الأوقاف.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 14 explained in plain English
This article deals with the case of an endowment that has a supervisor other than the Authority, but whose management has been entrusted to the Authority. Management under Article 1 is what the supervisor entrusts to another of preserving, leasing, developing and repairing the endowment.
What the article provides:
- The Authority receives a fee for this management.
- The one who sets this fee is the Board, but after agreement with the endower or the supervisor; so the fee is not imposed by one side.
- Maximum: the fee may not exceed 10% of the net annual income of those endowments, not of gross income and not of the value of the asset.
This provision reassures a supervisor who wants to benefit from the Authority's management expertise, as he knows in advance the ceiling that cannot be exceeded, and he remains free to negotiate a lower percentage.
This case differs from endowments of which the Authority itself is the supervisor; this article concerns only management of an endowment that has another supervisor. It is followed by Article 15, which deals with the Authority's powers to invest the assets of endowments of which it is supervisor.
Before signing a management agreement with the Authority, a supervisor would do well to consult a lawyer specializing in endowment cases to review the terms.
Practical example
Khaled is the supervisor of a family endowment in Riyadh whose net annual income is SAR 500,000, and he entrusted its management to the Authority. Khaled agrees with the Authority on the fee and then the Board sets it, and it may not exceed SAR 50,000 a year, that is, 10% of net income.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Frequently asked questions about Article 14 of the Saudi Endowments Authority Law
How much does the Authority of Endowments charge to manage an endowment?
The Board sets the fee after agreement with the endower or supervisor, and it may not exceed 10% of the endowment's net annual income.
Is the Authority's percentage calculated on gross or net income?
The text sets the ceiling as a percentage of the net annual income of the endowments the Authority manages.
Can a management fee be imposed without the supervisor's consent?
The text requires the Board to set the fee after agreement with the endower or the supervisor.
More articles on The Authority's Administration of Endowments
- Article 4
The article gives the Authority supervision over all public, private and joint endowments under Article 5, paragraph 5, and over the work of supervisors appointed by endowers, without violating their conditions or entering into supervision.
1 - تشرف الهيئة على جميع الأوقاف العامة، والخاصة (الأهلية)، والمشتركة، وفقاً لما ورد في الفقرة (5) من المادة (الخامسة) من هذا النظام. 2 - تشرف الهيئة على أعمال
- Article 5
The article lists the Authority's tasks: registering and inventorying endowments, supervision and management, oversight of supervisors, approving endowments funded by donations, collecting income, and developing endowment work.
تتولى الهيئة المهمات الآتية: 1 - تسجيل جميع الأوقاف في المملكة بعد توثيقها. 2 - حصر جميع الأموال الموقوفة، وبناء قاعدة معلومات عامة عنها. 3 - النظارة على الأوقا
- Article 23
The article binds the Authority in all its dealings and investments to the endowers' conditions, so long as they do not conflict with the rules of Islamic Sharia and the laws in force.
تلتزم الهيئة في جميع تصرفاتها واستثماراتها بشروط الواقفين، وبما لا يتعارض مع أحكام الشريعة الإسلامية والأنظمة النافذة.
- Article 25
The law replaces the Supreme Council of Endowments Law and takes effect 90 days after publication, applies to the Authority's endowments as an exception to Article 223 of the Law of Sharia Procedure, and repeals conflicting provisions.
1- يحل هذا النظام محل نظام مجلس الأوقاف الأعلى الصادر بالمرسوم الملكي رقم (م/35) وتاريخ 18 /7 /1386هـ، ويعمل به بعد تسعين يوماً من تاريخ نشره في الجريدة الرسمية
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.