Article 17 of the Saudi State Leasing of Real Estate Law

This article shows how damage is surveyed resulting from abnormal use and compensation is assessed for it, and it has two tracks depending on the amount of compensation:

1- The leasing agency's committee: the agency forms a committee of three of its employees to survey the damage, assess compensation and draw up a detailed report, within a period not exceeding fifteen days from the date the property is vacated.

2- Small compensation: if the compensation does not exceed 25% of the annual rent or SAR 100,000, whichever is less, the agency pays it to the lessor after completing the procedures in Article 19, which are notifying the lessor of the amount of compensation within a period not exceeding 15 days from the date it is assessed; if he accepts it, the head of the agency approves its payment, and if he does not accept it, he may file a grievance with the agency.

3- Larger compensation: if the compensation exceeds this limit, a committee of the leasing agency and the Authority is formed to assess it and draws up a report.

4- Period of the joint committee: it completes its work within a period not exceeding thirty days from the date the property is vacated, and in its assessment it takes into account the time that has passed between vacating and the time of its inspection.

The regulations set the provisions for the work of the two committees, and who bears the valuation fees according to responsibility.

Example of the limit: if the annual rent is SAR 200,000, then 25% of it is SAR 50,000, which is less than SAR 100,000, so the limit is SAR 50,000.

Article 18 warns that a lessor who repairs, modifies or changes the property before the damage is surveyed loses his right to request compensation.

If you have a practical question about leasing a property to a government agency, it is best to consult a lawyer who specializes in real estate or administrative cases.