Article 16 of the Saudi Expropriation of Real Estate for Public Interest Law
المادة 16 من نظام نزع ملكية العقارات للمصلحة العامة · الباب الرابع: التعويض والإخلاء
The rule is that compensation for expropriation is in cash, and it may be wholly or partly in kind, by alternative real estate or shares in the project, if the owner consents.
Official text (Arabic)
This article has not been amended since the law was issued.
يكون التعويض عن العقارات المقرر نزع ملكيتها نقداً، ويجوز أن يكون التعويض أو جزء منه عينياً إذا رضي مالك العقار المقرر نزع ملكيته بذلك، ويشمل ذلك التعويض بعقار بديل أو حصص مالية في المشروع الذي نُزعت ملكية العقار من أجله. وتحدد اللائحة الأحكام الخاصة بذلك.
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 16 explained in plain English
This Article sets the form of compensation:
- The rule: compensation in cash.
- The exception: compensation in kind, wholly or partly, on one basic condition: the consent of the property owner.
Compensation in kind covers two forms:
- An alternative property in place of the expropriated property.
- Financial shares in the project for which the property was expropriated.
Cash and in kind may be combined, because the Article allows "the compensation or part of it" to be in kind. The Article refers the detailed provisions on this to the Regulations.
In practice this means that under this Article the owner is not obliged to accept an alternative property or shares in the project; if he does not consent to this, his compensation is in cash.
This is linked to Article 15, which ends with a decision by the Governor approving the compensation price; this price is the basis of compensation whether it is paid in cash or matched with an alternative property or shares. Before agreeing to compensation in kind, the owner would do well to compare its value with cash compensation, and to consult a lawyer specializing in real estate cases.
Practical example
The land of a small company in Riyadh is expropriated for an urban development project, and it is offered that part of the compensation be shares in the project and the rest cash. This arrangement is not made unless the company consents to it; otherwise the whole compensation is in cash.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
How we write and review contentCivil Litigation & Compensation lawyers: ask a specialist about your case
Describe your situation briefly and we'll suggest a lawyer who specialises in this law
Civil Litigation & Compensation lawyers
Lawyers who handle this kind of case
Dr. Ali Al-Rubaie Law Office and Ittihad Al-Asr Legal Company
Abdullah Al-Saleh Law Office for Law and Legal Consultancy
Frequently asked questions about Article 16 of the Saudi Expropriation of Real Estate for Public Interest Law
Can I refuse the alternative land and claim cash compensation?
The rule in this Article is that compensation is in cash, and it is in kind only if the owner consents.
What forms does compensation in kind take?
An alternative property, or financial shares in the project for which the property was expropriated.
Can compensation be both cash and in kind?
Yes. The Article allows the compensation or part of it to be in kind if the owner consents.
More articles on Compensation for Expropriation
- Article 2
No real estate may be expropriated or temporarily occupied except for the public interest and in return for fair compensation, in accordance with the provisions of the Law and its Regulations.
لا يجوز نزع ملكية أي عقار أو وضع اليد المؤقت عليه إلا للمصلحة العامة، ومقابل تعويض عادل؛ وذلك وفقاً لأحكام النظام واللائحة.
- Article 6
A person whose property is expropriated is entitled to the market value plus 20% and compensation for damages, and a person whose property is temporarily occupied to not less than the fair rental plus 20% and compensation for damages.
1- يستحق مَنْ نُزعت ملكية عقاره تعويضاً وذلك وفقاً للآتي: أ- أن تكون قيمة التعويض بناءً على القيمة السوقية للعقار. ب- أن يضاف إلى القيمة السوقية -المشار إليها ف
- Article 15
A committee of three accredited valuers in the Authority reviews the valuation reports and recommends the average price, which the Governor approves and which is notified to owners within 90 days of referral of the survey report.
1- تراجع التقارير -المعدة وفقاً للفقرة (3) من المادة (الرابعة عشرة) من النظام- لجنة تُشكل في الهيئة، تُكوَّن من ثلاثة مقيمين معتمدين، على أن يُراعى ألا يقل تصني
- Article 21
If the property's area in the ownership documents differs from its actual area, compensation is assessed on the smaller area, preserving the owner's right to prove ownership of the part not counted.
إذا اختلفت مساحة العقار المحددة في مستندات إثبات الملكية عن المساحة الفعلية للعقار بحسب وضعه على الطبيعة، يقدَّر التعويض بحسب المساحة الأقل، وذلك دون إخلال بحقو
- Article 22
The Article explains how compensation is assessed if part of a property is expropriated, according to whether the remainder can be used, and when the whole property is expropriated.
إذا اقتصر نزع الملكية على جزء من العقار فيُتبع في ذلك ما يلي: 1- تُقدر قيمة مساحة الجزء المنزوعة ملكيته والبناء والغراس المقام عليه؛ إذا كان الجزء الباقي من الأ
- Article 23
The Authority sets the evacuation date with the project owner and compensation is paid before it except in exceptional cases, and owners may ask for reassessment if it is not paid within 3 years, taking the higher assessment.
1- تحدد الهيئة، بالاتفاق مع الجهة صاحبة المشروع، تاريخ إخلاء العقارات المقرر نزع ملكيتها، وتُبلِغ الهيئة مالكي العقارات المقرر نزع ملكيتها بذلك. 2- تُستكمل إجرا
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.